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How Is The Government Cracking Down On Fake NGOs

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Back in 2013, the Delhi High Court stated that 99% of the NGOs in India are money-making devices. That’s only 1 out of 100 NGOs serve the purpose they had actually been established for. Increasingly, the charity organisations were duping donors, diverting funds for their personal purposes and becoming a haven for laundering black money.

But, when the Modi government came to power in 2014, these fraudulent NGOs started flickering all over India. As PM Modi, since his inception, he has literally been on a spree to crackdown these NGOs.

Here’s how the government is making the operations of such NGOs tougher and tougher:

Making foreign funding tougher:

India foreign funding

In 2016-17, foreign funding of NGOs down to 36%
Donations dipped from Rs. 17, 773 to Rs. 6,499 crore
Approximately 20,000 FCRA licenses of the NGOs have been canceled
1300 denied renewal of FCRA licenses

These numbers and facts point towards the prevalent stringent environment under which the charity organisations receiving foreign donations are operating in India. We receive a huge share of funds and donations – whopping Rs. 85,000 crore – from foreign countries and organisations. However, not all NGOs in India can receive foreign donations. Only the ones which are registered with the Government under the Foreign Contribution Regulation Act (FCRA) are eligible for such donations. Canceling their FCRA license would mean no foreign donations. Since the past few years reputed institutions and organisations – Greenpeace,  Jawaharlal Nehru University (JNU), Indira Gandhi National Open University (IGNOU), Indian Institute of Technology (IIT) in Delhi and Madras, Infosys Foundation– have lost their licenses.

That’s because these are the ones who have been repeatedly violating the provisions of this act. For instance, section 18 of the FCRA clearly mandates the filing of financial returns, duly accompanied with the balance sheet and statement of receipt and payment, certified by a chartered accountant. However, as per reports, only 10% of the organisations have actually filed such return. Such lack of accountability and transparency makes it almost impossible to track how the foreign money is being utilised. It could be used for something small like funding the offender’s trip to Goa or something huge and dangerous like funding terror, anti-national activities or a religious conversion which is illegal in India. 25 organisations lost their licenses to receive such funding because of their ‘anti-national’ activities. As per the Intelligence Bureau, there are many NGOs mushrooming in trouble-hit areas like Kerala, Uttar Pradesh, Bihar, Chhattisgarh and Jharkhand. On paper, these NGOs are working for a cause, but in reality are a front to receive money either for terror or laundering

NGOs foreign funding

By making such funding tougher, the government hopes to bring in transparency in the way the funds are utilised and for what purpose.

Blacklisting fictitious NGOs

In February 2018, Salman Khan’s NGO, Being Human Foundation, was blacklisted by the BMC for not being active and fulfilling the projects for which they had established in 2016. The NGO was founded with the objective of providing healthcare facilities and education of the underprivileged at a better price. And was allotted 250 sq meter space in Bandra to run one of their projects which was setting up 24 dialysis machines for operations. A project which was never implemented due to ‘some difficulty’.

This is just one of the many organisations blacklisted by the government. On regular intervals, the Ministry of Social Justice and Empowerment, Council for Advancement of People`s Action and Rural Technology (CAPART) and the Lok Sabha – releases names of ‘blacklisted NGOs’ on their websites which to help the public know the NGOs that are performing and which are not. As per the August 2018 list, the government has blacklisted 118 NGOs.

A good step. But not a good enough one. In 2017, the Supreme Court told the government that mere blacklisting the NGOs will not suffice. There is a need for criminal action for misappropriation and swindling of funds disbursed to NGOs for certain purposes. The court directed the Centre to draft a new and a stronger law to regulate the NGOs and disbursement of funds.

Tightening the laws

NGO laws

A CBI report in 2017 brought to light the fact that some states in India did not even have the laws which required the NGOs to be transparent about their finance. For instance, Kerala which has roughly 3 lakh NGOs have no legal provision to submit returns.

In response to this report and the court’s hearing, the government framed new guidelines which made it mandatory for all the NGOs to register afresh with the Niti Aahog’s NGO Darpan in order to receive government grants. This process would include the organisations giving in-depth details about their past work, fund utilization, yearly audit report and key people managing the NGO. However, to ensure complete transparency the NGOs would not only be under the scanner of the government but would include a performance audit by independent third parties and Comptroller & Auditor General of India as well.

Further, the Central ministries also finalised a mechanism to regulate and ensure the donations and funds are used for a constructive purpose. The government would now onwards not only blacklist an NGO as done earlier, it would also file a suitcase to recover the money siphoned off. And will also have the right to initiate a criminal prosecution for not completing a project within the prescribed deadline.

Checking the flow of donations ngo funding

Apart from tightening laws and regulating foreign funding, the government is also taking measures to ensure transparent financial transactions within the country. As of today, there are many NGO which have accounts in cooperative or state government-owned banks – many of which do not have core-banking facilities. Under the core banking system, all the branches of the networked banks are interconnected. This would allow the security agencies to access the accounts of the NGOs on a real-time basis. Thus in 2017, the government asked approximately 6,000 organisations to open their accounts in banks having core banking facilities.

Accrediting the NGOs

While the goal is to prevent the errant NGOs from continuing with their malpractices, let’s not forget that there are some genuine NGOs doing an amazing job. And the government is doing their bit to encourage more like these. In 2014, just like how it’s done in countries like the US, we too started grading the NGOs based on their good performance. CRISIL, India’s leading rating agency was charged with the responsibility of grading the NGOs. For instance, HelpAge India was assigned a VO-1A grade, which means ‘very strong delivery capability and high financial proficiency’. A step like this would inspire the other NGOs to achieve such a recognition.

At the same time, there are independent NGOs have sprung up which act as a watchdog of other NGOs. Organisations like Credibility Alliance, GiveIndia, Charities Aid Foundation, The Council for Advancement of People’s Action and Rural Technology – are committed to enhancing accountability and transparency in the voluntary sector. After a thorough scrutiny NGOs are accredited based on a set of agreed and codified norms, principles, standards and practices. After a green tick, the genuine NGO will be listed on their website which means they are certified to receive donations and funds.

Clearly, in such a scenario donating to a genuine organisation could be a task. Here’s a video which will guide you to understand which NGO is fake and which ones genuine:

How Is The Government Cracking Down On Fake NGOs was last modified: by
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