Non Government Organization or NGOs in India are governed by obsolete and opaque Societies Registration Act and therefore abused by all. This includes polititians, on top of all other. Foreign remittance to NGOs is governed by Foreign Contribution Regulation Act. Every NGO has to apply for a licence to get foreign currency for a charitable purpose. NGOs have to file an annual return of expences with the licensing authority. 20000 NGOs failed to comply with this small requirement and therefore their licence was cancelled in last 4 years. In enquiry of several NGOs these were found to be hiring journalists in the name of study and funding protests. Now the Government has decided to tighten noose around these NGOs.

FCRA amendment

The amendment makes Aadhaar (biometric) mandatory for all the office bearers of an NGO seeking foreign donations, prevents transfer of foreign contributions to any other person unless they also possess FCRA certificate, enables the Centre to allow an NGO to surrender its FCRA certificate. It also bars public servants from receiving funds from abroad through the conduit of NGO.

There is a cap of 20% on administrative expences. All FCRA bank accounts shall be permitted in one or more specified branch of State Bank of India. Earlier all banks and branched were permitted. This is to ensure easy tracking of funds.

While presenting Amendment Bill, Union minister of state for home Nityanand Rai told Lok Sabha that a large proportion of foreign contribution is opaque and said the amendment is a “national security law” that ensures foreign funds do not harm the political environment of the country. Rejecting claims that it would harm educational institutions run by Christian organisations, he said it will ensure that contributions are “not misused”.

Some people say the amendment will destroy small NGOs that partner with organisations that have a wider scope and scale. Amitabh Behar, CEO of Oxfam India, writes the existing FCRA rules already make the NGO sector “one of the most regulated sectors”, with regular filings to income tax and other divisions of the government. The amendments, he said, “open the floodgates for arbitrary, vindictive action by the authorities.” Amitabh Behar is known associate of Harsh Mandar. Activities of both these people have been a matter of debate if not vile accusations on social media.

But the political use of foreign funds brought in for charitable purpose can not be permitted. It is a fraud. No persons can claim convenience to commit fraud as their birth right.

While every individual can not open a bank account without Aadhar identification, the fact that NGO were doing it was a serious lapse and the time taken (4 years) is deplorable and show the bureaucratic resistance to the move

It would also be important that now Societies Registration Act may be suitable amended to bring it on par with Company limited by guarantee. But as stated above, there is vested political interests involved. Unfortunately no one is speaking about this aspect. This speaks of volume of rots.

Global problem:

Use of NGOs for bribes is also a well known conduit around the world. As to how Bill and Hillary Clinton couple used it to enrich them is documented in a book called “Clinton Cash”. Do read it.

Singapore had introduced very strict laws against use of foreign funds for any political activities. These laws operate now for about 4 decades. Present measures by India fall short of those measures. But that may be next steps.