More than 10,000 NGOs may lose license to receive any foreign grant as they failed to furnish details of their income and expenditure for 5 years—2010-11 to 2014-15 by the deadline given by Ministry of Home Affairs.
Recently, one SC judgment suggested centre to frame a statutory law regarding the same. It also directed the government to audit nearly 30 lakh NGOs which receive public funds but do not explain their expenditure.
Thus, Centre framed new accreditation guidelines for NGOs and voluntary organisations in the country which are as follows:
- Evaluating past track record of applicant and internal governance and ethical standard of the NGOs.
Their outcome evaluation through independent third parties and performance audit by the CAG
- Prescribed the manner of maintenance of their accounts
Prescribed procedure for recovery in case they fail to submit their balance sheets as according to CBI, only about 3 lakh of about 32 lakh NGOs file their balance sheets with the government.
The government and CAPART will not only blacklist such NGOs as earlier but also move to file civil suit for recovery of money siphoned off.
- There is also planning for roping in Income Tax authorities for criminal conviction.
All these restrictions are reasonable as under Article 19 (1) (c) citizens have the right ‘to form associations and unions’ subject to reasonable restrictions such as sovereignty and integrity of India, the security of the state, friendly relations with foreign states, public order etc.
Foreign Contribution (Regulation) Act (FCRA)
Foreign Contribution (Regulation) Act (FCRA) is a tool used to regulate foreign financial aid received by the
NGOs. As per FCRA, if an NGO is put under prior permission category, it is barred to receive foreign funding from abroad without taking permission from the Home ministry. However, there are some issues with the Act
Abuse of legal procedures – Government seems to be rejecting licenses non-objectively. This has been observed by NHRC as well.
Arbitrarily curbing dissent– could be used to silence any opposition to government and target rights-based advocacy groups
Human rights issue– may affects human right of people as they have served basic facilities to citizens of India since decades
Non-conformity to international standards– India is a party to the International Covenant on Civil an Political Rights under which, right to freedom of association is incorporated.
FEMA and FCRA – presently, Home Ministry monitors foreign funds donated to NGOs and organisations through the FCRA. But for effective monitoring it also wants to monitor NGOs under FEMA (under finance ministry) as many International donors such as the Ford Foundation, Canada’s International Development Research Centre etc. are registered under it.
Justification by government for such regulation
Public servants– any organisation, trust or NGO that gets Rs 10 lakh as foreign aid or Rs 1 crore as government aid comes under the definition of “public servants” under Lokpal and Lokayuktas (Amendment) Bill, 2016
Protecting sovereignty –to curb foreign interference in domestic politics.
Regulating misuse of funds –As per the Report of the Intelligence Bureau, some of the terror funding was also being done through this route.
Thus, following steps should be taken to resolve the issue
Legitimate restrictions –Although freedom of association is not an absolute right, restrictions should be precisely articulated as criteria of “public interest” and “economic interest” give state discretion
National Accreditation council of India –An autonomous and self-regulating body should be established to regulate corrupt and unscrupulous NGOs that may be laundering money.
FCRA-PFMS system envisioned as far back as 2015 need to be operated smoothly. Thus, NGOs that have received foreign funding should have their bank accounts with institutions that have core-banking facilities so that RBI, and therefore the MHA, have real-time updates on transactions.