Chanakya IAS Academy Blog


Non-Government Organisations (NGOs)

Role played by NGOs

  • A non-governmental organization (NGO) is a not-for-profit organization that is independent from states and international governmental organisations. They are usually funded by donations but some avoid formal funding altogether and are run primarily by volunteers.
  • NGOs play a very important role in the entire development process. They have a unique connect with grassroots and hence, play an important part in making development inclusive
  • NGOs are important partners of the State in the various stages of policy advocacy, development, implementation and auditing too

Issues/Areas of Concern

  • The present crackdown on foreign-funded NGOs in India began after the Intelligence Bureau submitted a report on NGOs in 2015 whereby NGOs are restricting India’s developmental projects.
    • The report, which was leaked to the press, claimed that the work of ‘anti-national, foreign funded NGOs’ working on issues related to nuclear projects,genetically modified organisms, mining and other big projects, had led to a decline of 2-3 per cent in the country’s GDP growth rate
  • Only about 10 % of the total 22 lakh registered NGOs file annual income and expenditure statements, as revealed by CBI
  • Some NGOs are also allegedly fronts for foreign supported extremist or secessionist groups
  • Allegations of use of foreign funds for religious conversions have also been made
  • There have been many reports of misappropriation of funds by NGOs and lack of transparency in their functioning

Provisions of FCRA (Foreign Contribution Regulation Act) with respect to NGOs

  • The Act seeks to regulate the acceptance and utilisation of foreign contribution and hospitality
  • Under the law, the Central Government has the power to prohibit from accepting foreign contribution or hospitality for activities detrimental to national interests or national security

Recent Government rules and regulations

  • The Government has over the past 2 years sought to check misappropriation of funds and “anti-national” activities by using provisions of the FCRA
  • The government has also cancelled the licenses of a number of NGOs for failing to comply with FCRA

Provisions of new Foreign Contribution Regulation Rules, 2015

  • stipulate that NGOs must not use foreign funds for activities "detrimental to national interest"
    • The terms public interest, ‘security, scientific, strategic or economic interest’ has been provided, opening the door, NGOs say, to official action against a whole range of activities that are otherwise legal under Indian law.
  • Require NGOs to register themselves online and report receipt of any foreign funds within 7 days
    • Logistical difficulty; NGOs don’t have the requisite resources
    • Earlier, only donations above 1 crore were needed to be specified annually
  • The govt later toned down this provision- reporting to be quarterly instead
  • Similarly stricter rules for disclosure, of funds for NGOs, by banks have been made; within 48 HOURS
  • All dealings with NGOs to be online; NGOs required to register online at government portal.
    • Streamlined registration, renewal of licenses and permissions for NGOs
  • NGOs have to reveal the details of their social media accounts, and disclose whether their office bearers are part of other NGOs, to help in profiling them
    • The provision was later made optional; besides govt would help NGOs host websites

NGOs need to register with NITI Aayog

  • Centre has made obtaining unique identification numbers and registering NGOs on the NITI Aayog portal, including the details of the Aadhaar and PAN numbers of all their trustees and office- bearers, mandatory for applying for grants from any ministry.
  • It was also decided that a system should be developed to give unique entity numbers to charitable trusts and societies.
  • Significantly, a June 26 government notification said if an NGO receives government funding in excess of Rs 1 crore, those handling its day-to-day operations will be treated as public servants under the Lokpal and Lok Ayukta Act (2013).In case of foreign funding, this limit was pegged at Rs 10 lakh a year.
    • The notification also said that managers, directors, board members of NGOs will have to declare their personal assets, jewellery, cash, moveable and immoveable property by July 31.
    • They will also be subject to rules and regulations for government officials under the Prevention of Corruption Act.
    • The notification has caused considerable consternation in the community raising fears of excessive control by the Centre, though officials maintain the order is only to pave the way for making NGOs accountable

Issues/problems with the regulations

  • Registration and compliance with the rules and regulations will take up substantial resources for NGOs
  • compliance with such detailed regulations will especially be difficult for small NGOs
  • Centre has also faced ire internationally due the clamp down on NGOs

Way forward

  • NGOs should try to build and regain lost public trust by better transparency in functioning
    • External auditing
    • Increased Information disclosure
    • Accountability while using public funds
  • Govt must act both as an enabling medium and a regulator for checking malpractices
    • Enabler
      • Easier mechanisms to avail tax benefits, registration etc.
      • Training of govt. officials for constructive relations with NGOs as per National policy on voluntary sector
      • Joint consultative Groups comprising of NGOs and relevant administrative bodies- for better engagement
    • Regulator
      • Enforcing laws but in true spirit
      • Handle the component of engineered dissent in an exemplary manner
      • Need to handle public perception about development initiatives; give a counter narrative rather than refuting the current narrative of “clamp down on NGOs”
  • Greater transparency and accountability for NGOs
    • Greater disclosures by NGOs; Maybe RTI- for NGOs through which Govt. programmes are being outsourced
    • National regulatory agency for NGOs
    • Encourage social audits of their projects and initiatives.
Read 2377 times Last modified on Friday, 19 August 2016 10:51

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