JOIN USAfter suspending the FCRA (Foreign Contribution Registration Act) registration of Greenpeace India and placing foreign donor Ford Foundation on the watch list, the Union government has now cancelled the licences of 8,975 non-government organisations (NGO) for failing to file annual returns.
Earlier on October 16, 2014, the Union Home Ministry had issued notices to 10,343 NGOs asking them to file their annual returns within a month with details of foreign contributions received. The ministry had specifically asked for the amount, sources, purpose and the manner of utilising the foreign funds. The government is now examining the replies of 268 NGOs that responded to its notice.
The recent crack down on the 8,975 NGOs is to be viewed in the context of them not responding to the government notice. Most of these NGOs are now up in arms with the Modi government for cancelling their licences. In an unprecedented show of unity, they have now formed ‘Janadhikar Sangharsh Samiti’ to show their protest.
Many Foreign Funded NGOs (FFNGOs) are on the watch list of both the UPA and the NDA governments. The major complaints against these NGOs included misappropriation of funds, lack of transparency and accountability. A CBI investigation of NGOs across the country reported that of the 22,39,971 NGOs in 20 states, only 10 per cent submitted annual returns. In many north eastern states they never file returns.
Globally, many governments have encouraged the functioning of NGOs to supplement their social welfare schemes. But of late, they are becoming increasingly critical of NGOs and their functioning. In some cases, there is enough room to suspect the legitimacy of NGOs and NPISHs (Non Profit Institutions Serving Households). Now, there is a growing demand to monitor the activities of NGOs and to subject them to some form of regulation. Governments and the civil society demand greater transparency and accountability from NGOs.
India has been a fertile land for the mushroom growth of NGOs. According to a recent estimate, there are about 20 lakh NGOs in India, one NGO per 600 people. But the people in the non-profit sector say that the number could be too low since NGOs are also registered under the Public Trust Act, The Charitable and Religious Trust Act or the Indian Trust Act.
In UP alone, there are about 5,48,194 NGOs, while Kerala has 3,69,137. The recent NGO boom is triggered by a combination of increasing wealth, a growing entrepreneurial spirit and rising social inequality. The scope and significance of the non-profit sector emerges from the governance gap prevalent in developing countries. Since the government can’t perform all its tasks, it is increasingly partnering with NGOs to help out.
Miserable failure
The benefits accruing to the beneficiaries are not commensurate with the number of NGOs functioning in the country. The very high NGO density has miserably failed in reaching out to the needy. Very often, the powerful international NGOs have a patronising attitude and the local beneficiaries automatically turnout to be apologetic.
International NGOs are powerful industries by themselves. In many developing countries including India, one can see the perpetual presence of these NGOs even after the original purpose of their entry is fulfilled. It seems these NGOs and their local beneficiaries enjoy this perpetual dependency of the locals.
NGOs are enterprises that provide services and survive on donations and government subsidies. It should be mandatory for them to be transparent and accountable about their management practices. Since most of them are tax-exempt, they must fulfill government conditions regarding their business.
In many developed countries, NGOs voluntarily abide by government guidelines for the use of funds. Besides, new initiatives are currently under way to reinforce corporate governance within NGOs to bring in more professionalism in their everyday functioning. But recent research studies have concluded that NGOs fare better if they adhere to democratic norms without being influenced by the corporate governance structure.
It should be specially noted that a few NGOs that serve in the health and education sectors have truly contributed in supplementing governmental initiatives in these fields. Successful NGO models could be replicated by the government on a wider scale.
A more humane and cost effective approach must be followed by NGOs. They should not relegate themselves to the level of fund raising agencies employing professionals who do not have any aptitude for social service. It is time for the NGOs to cease their advocacy roles and go back to charitable works in countries such as India.
(The writer is a Bengaluru based professor of economics)