Proposed new law to regulate NGOs

A recent report in the Times of
India states: “Decision in 4 weeks on new
law to regulate NGOs, their funding”. Here
is a link to the report:  http://toi.in/LkzhhZ/a19ai

According to the report, the NDA
government appears to have told the Supreme Court that a
decision would be taken within four weeks “on the need for a
standalone law to regulate activities, funding and expenditure of
non-governmental organizations (NGOs), lakhs of which have mushroomed
across the country.” What the NDA government has failed to add is
the fact that many among these mushrooming NGOs are floated by
politicians or their own relatives. 

Politicians and their political
parties cannot receive funds from foreign sources under FCRA 2010.
However, NGOs set up by their relatives, friends or supporters can!
Politicians and their political parties cannot receive CSR funds from
companies under section 135 of the Indian Companies Act 2013.
However, NGOs set up by their relatives, friends or supporters can
and reportedly do! Rightly has petitioner-cum-advocate M. L. Sharma
been quoted in the aforesaid report to have said that till date, not
a single NGO has been prosecuted, “because ninety per cent of
NGOs are owned either by politicians or linked to bureaucrats”.

The bench of Chief Justice of
India J. S. Khehar and Justice D. Y. Chandrachud has said,
“The issue is very serious. We do not want to push the
government… Whether you want to enact a separate legislation or
not, you have to take a decision … Previously, we found that not
many have filed audited accounts. The government has already
initiated civil and criminal proceedings against defaulting NGOs. So,
it is not as if there is no legal framework available to take
action.” This view was based on the CBI having informed the
Supreme Court that it had detected 32.97 lakh registered NGOs and
voluntary organizations, but, less than ten per cent of them, 3.07
lakh, filed their audited accounts with the Registrar of
Societies.

Once again, here the CBI has
failed to inform the Supreme Court that many offices of the Registrar
of Societies across India simply register societies and have no
mechanism in place to regulate such societies. It is a known fact
that even when NGOs in some states try to submit their accounts at
the Registrar’s office, they are told that there is no need for
them to do so.

Does the National Capital, New
Delhi or for that matter Bangalore have a charity commissioner to
regulate charitable trusts? The answer is in the negative. The
failure is not on the part of the NGOs. The failure is on the part of
the state governments for not having regulatory agencies in place.

On January 10, the Supreme
Court had ordered government to scrutinize accounts of lakhs of
NGOs and voluntary organizations, which together received thousands
of crores of rupees of public funds, and take civil and criminal
action if they were found to have misused the grants.

Later, on April 5, 2017, the
Centre had filed in the Supreme Court draft guidelines to regulate
NGOs and said all such organizations, which intended to receive funds
from governments, must register afresh online with Niti
Aayog’s ‘NGO-Darpan’ portal giving details of
their past work, fund utilization, yearly audit reports and key
persons responsible for managing the NGO.

Additionally, a provision in the
draft guidelines intends to deter non-serious NGOs from seeking
government funds. It mandates NGOs and its office-bearers to execute
a bond, equivalent to the fund amount received, promising to refund
to the government with 10% interest the entire amount if the funds
were found misused, misappropriated or not used for the purpose for
which they were sanctioned.

Let’s wait and see what the
government comes up with within four weeks. Till then let’s console
ourselves saying: These are challenging times and these challenges
should make us better and not bitter!

Noshir H. Dadrawala