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One of the noticeable strengths of
Indias democracy are its Non-Governmental Organisations
(NGOs), a voluntary action move-
ment which is all encompassing in
both quality and quantity. NGOs
are firmly embedded in the coun-
trys socio-economic life. They
are involved in a variety of act ivities from policy
analysis to school programmes, from part icipatory
natural resources management to activism, now even
to street-level activism. Many NGOs are involved in
capacity building and creating mass awareness in a
wide ra nge of fie lds: from c hildren rights, women
empowerment, old age, health, nutrition, human
rights, environment protection, disability, disarma-
ment issues, tribal protection, education, income
generation, rural issues, farmers, Dalit and minority
issues, disaster, advocacy, corruption, governance,transparency and integrated development you
name it. The NGO sec-
tor is robust in its truest
sense.
India has more than
43,000 registered NGOs
under the Foreign Con-
tribution Regulation Act
(FCRA), a number that
ranks among the highest
in the world. While there
have been controversies
about just how much
regulation the voluntary
sector requires and ques-
tions have been raised on
its sources of funding, it
is also commonly acknowledged that the govern-ment cannot do every thing: there have to be non-
government actors who can take development plans
down to the masses because the country is so huge
and varied that you need outside help. So a sec-
tor which has seen untrammeled growth in the last
three decades or so, is now suddenly in the eye of
the storm after Prime Minister Manmohan Singh
accused US-backed NGOs of fueling protests against
nuclear reactors in Tamil Nadus Kudankulam, lead-
ing to an outcry.
The question that needs answering is this: is the
Indian government tightening its noose around
NGOs? According to well placed sources, the govern-
ment is actively working on a blue print to regulate
the NGO sector. It is examining a Pla nning Commis-
sion proposal to bring the voluntary sector under
the ambit of the RTI Act. The ostensible aim is to
make this vast sector of civil society activists, who
receive public funds, more accountable and trans-
parent. The crackdown, it would appear, has begun.
The government has issued show cause notices to
21,000 NGOs out of total 43,033 that are registered,
which it says are not complying wit h its new policy
and action is being taken for cancellation of theirregistration certificates after examining their replies.
Union home secretary R.K.Singh, explaining the gov-
ernment clampdown in a January 2012 report, has
noted that while it is not proper to make sweeping
generalisations, it is necessary to note that the NGO
sector in India is vulnerable to the risks of money
laundering and terrorist financing.
Therefore, necessary steps for rigorous e
ment as well as coordination with countries
enforcement will continue. The Planning Co
sion has even suggested the creation of a se
ministry of voluntary affairs and an apex b
bring all NGOs under one umbrella. Says Ca
Bernard, member of the Sisters of the Cross
Chavanod, France, I think the governmentbind and it seems not to trust itself and this
in its relation to other institutions, including
It is certainly not democratic to regulate NG
ways we hear it reported in the media an d
wise. It is control not regulation. The need t
partnership and dialogue. The move agains
is considered surprising, considering the c
Sonia Gandhi-managed National Advisory C
(NAC) which includes a clutch of some of th
reputed voluntary activists in the country like
Roy, Deep Joshi, Madhav Gadgil and Mirai C
jee, coordinator of SEWA, Ahmedabad. Man
Singh in an i nterview to Science magazi
quoted as saying that the Atomic energy prog
has got into problems because these NGOs,
I think based in the US, dont appreciate th
for our country to increase energy supply, re
to the protests against Kudankulam nuclear station whose launch has been halted by pro
raising safety concerns.
Dipayan, a Kolkata-based environmental a
chooses his words carefully. I believe, we a
not that empowered to lodge a protest unle
ported by any external agency (in this case Am
NGOs) else locals would have also raised their
Activists say noto the Kudanku-lam NuclearPower Plant anda banner askingpeople whetherthey are awareof their humanrights (far left)
NGOs iN iNdia areOpeN tO risks Of mONeylauNderiNG aNd terrOrfiNaNciNG r.k.siNGh,uNiON hOme secretary
the NGOsectOr iN
iNdia isrObust aNd
there aremOre thaN
43,000reGistered
bOdieswOrkiNG
Photo:
AjitKrishnA
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10 governance watch May-June 2012 May-June 2012 governan
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for debating uranium
mining in Porkut area,
Nongri in West Khasi
Hills or in Yodogawa
mines of Jharkhand.
To that extent the PM
is right, but would he
pay equal attention to
genuine issues raised
by civil societies in thedevelopment sector? I
think not, because the
issues have to suit the
political will.
According to the gov-
ernment report, NGOs
have received more
than Rs. one Lakh Crore
in the last 20 years as
foreign contribution
from various coun-
tries. Nearly 5o per cent
NGOs have not declared
the amount which they
have received from for-
eign donors.
Only 21,508 associations
out of 43,000 odd have sub-
mitted their returns while
7,275 have reported nil re-
ceipt of foreign contribution.
The report accepts that the
number of NGOs registered
under FCRA would be less
than 2 per cent of total num-
ber of NGOs.
While the reality is that In-
dia has no centralised data-
base on the number of NGOs
and the quantum of finance
involved in their operations, unofficial figures indicate
that there are over 40 lakh NGOs registered under the
Societies Registration Act, Trust Act and other such
enactments.
To be sure, India has a long distinguished traditionof voluntary action but post 1947, this practice has seen
a dip in the form of donations from non-institutional
communities due to urban migration and the beginning
of state welfare as policy. Before Independence, volun-
tary organisations imbued with Gandhian philosophy
involved themselves in the social welfare sector.
Notes a steering committee report of the Planning
Commission on the voluntary sector: It has been shaped
by two major influences: one rooted in indigenous tradi-
tions and value systems, and the other a product of the
interface between the Indian society and the western
world. Indian tr aditions and va lue-systems ar e rooted
in religion that prescribes a code of ethics for the indi-
vidual and t he principles gover ning socia l life.
Historically, philanthropy and individual acts of social
service have been the main forms of voluntary activ-
ity in India. Institutionalised social service activities
existed largely within the domain of religious institu-
tions: ashrams and maths among Hindus, Waqfs and
Khanqahs among Muslims and Gurudwaras and Deras
among Sikhs.
Notes the Planning Commission, The concept of
secular voluntary activity accelerated with the advent
of western, mainly British, influence in India. The work
of Christian missionaries in the field of education and
health care, especially in remote tribal areas, stood
out as examples of dedicated service to the poor, even
though the motivation may have been to win over thesepeople to Christianity.
The example of Christian missionary work exerted a
great influence on the new English educated elite that
emerged in the 18th and 19th centuries. The organised
form of charity and service to the poor practiced by
the Christian missionaries impressed many who tried
to emulate them.
mObilisiNGresOurces
fOr NGOs isNOt aN easy
task. theybaNk ON
iNterNalaNd
exterNalsOurces
The activities of the Brahmo
Samaj in Bengal, Arya Samaj
in north India and the Ra-
makrishna Mission in differ-
ent parts of the country are
noteworthy.
Resource mobilisation for
NGOs or in India today is
not an easy task. They man-
age it either from internal
sources or external. Earlier
funds were mobilised from
various non-inst itutional and
institutional sources.
Since the late 1960s, for-
eign funding to NGOs started
flowing from international private non-institutions and
global private institutions. Funding from the Lions Club,
International Red Cross Society and Amnesty Inter-
national come under this category. Similarly NGOs of
industrialised countries such as Oxfam-America, CARE,
Action Aid, U.K. became t he source of funding.
Solidarity groups and international trade unions areanother source of global funding from developed na-
tions. Their funding is mainly confined to issues relating
to human rights, women and child development and
environment. Most of the private institutional funding to
NGOs come from the international corporate bodies.
Institutional funding also comes to NGOs from bilat-
eral and multilateral donor agencies. Bilateral funding
includes aid from agencies, departments
tries of countries such as U.S.A., U.K., Japa
Denmark, Norway, Canada and Australia
leading country followed by Germany, Ital
and the United Kingdom among the bilatera
to India.
In addition, there are the multilateral
funding agencies who support grassroots act
ever their funding is very limited and is conf
to the major voluntary organistions in Ind
do not fall under the FCRA. Such Multilate
agencies include UN agencies like WHO, UN
CEF, FAO, UNFPA, UNDP, ILO, UNEP, the W
International Monetary Fund (IMF), Asia
ment Bank (ADB), African Development B
Islamic Development Bank (IDB), the Com
Development Corporation (CDC), the Arab
multilateral aid agencies. These agencies p
ing under the overall supervision and regul
government. There are many governmental
quasi governmental agencies like the Nation
fund, Central Social Welfare Board, Fami
Associations of India and CAPART which acAt the lo cal leve l, funds a re provided l arg
the district rural development agencies (D
parishads and panchayati raj institutions e
Interestingly, state funding of the volun
easily outstrips what they receive f rom exter
For example the ministry of social justice a
erment had supported 2,100 voluntary or
diGvijaysiNGh
Named aN
eurOpeaNNGO fOrbeiNG iN
tOuch withiNsurGeNts
iN theNOrth east
Children withPM Manmo-
han Singhduring thecampaign
Nine is Minein Delhi
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12 governance watch May-June 2012 May-June 2012 governan
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Name of the Association(Rs. inCrore)
World Vision of India, Tamil Nadu 208.94
Rural Development Trust, Andhra Pradesh 151.31
Shri Sevassubramania Nadar Educational Charitable Trust, Tamil Nadu 94.28
Believers Church India, Kerala 88.45
Caruna Bal Vikas, Tamil Nadu 82.60
Womens Development Trust, Andhra Pradesh 80.29
Sri Sri Jagadguru Shankaracharya, Karnataka 70.67
Action Aid, Karnataka 66.46
Bal Raksha Bharat, Delhi 66.03
SOS Childrens Village of India, Delhi 62.21
Love India Ministries, Kerala 62.04
Oxfam Trust, Delhi 58.80
Plan International Inc., Delhi 55.36
Tibetan Childrens Village, Himachal Pradesh 53.49
Missionaries of Charity, West Bengal 53.35
Sri Sathya Sai Central Trust, Andhra Pradesh 52.68
Population Services International, Delhi 49.53Aga Khan Foundation, Delhi 49.17
Gospel For Asia, Kerala 48.91
Bochasanwasi Akshar Purushottam Swaminarayan Sanstha, Gujarat 48.22
Compassion East India., West Bengal 48.19
Churchs Auxiliary For Social Action., Delhi 44.44
A.M.G. India International., Andhra Pradesh 44.30
Pratham Mumbai Education Initiative., Maharashtra 44.23
Caritas India., Delhi 43.58
to rn aoon (2009-10) There are manyexamples to show howsome of these foreign-funded NGOs areharmful for the nationand playing into foreignhands
Will the PM pay attentionto genuine issues raisedby civil societies in thedevelopment sector? Ithink not, because theissues have to suit thepolitical will
I think the governmentis in a bind and itseems not to trustitself and this reflectsin its relation to otherinstitutions, includingNGOs
Arundhati Ghosh
Dr. Dipayan
Dr. CatherineBernard
in the country and had released Rs 1,800 million
during 1999- 2000, as against Rs 1,110 million in
1998-99.
At present the total central government funding is
estimated to cross Rs 10 billion from Rs. 1,500 million
during the Seventh Five Year Plan period.
Despite their over-arching presence and solid work
on ground, a section of those opposed to NGOs have
levelled a variety of charges, which include voluntary
groups raising anti-development slogans in the nameof environmental or safety hazards like Kudankulam,
unfair criticism of security forces on human rights is-
sues, influencing voters and could be some instances,
be supporters of radical politics through funding.
In 2002, minister of state for external affairs Digvi-
jay Singh named an European NGO for its involvement
with underground in surgents in the Nort h East. In his
reply, Singh named Netherlands as one of the countries
used by radicals to further their anti-India activities,
besides Pakistan.
According to officia l records, Netherlan d-based NGOs
NCIV (Netherlands Council on Ingeneous Volk geist)
led by Leovander Vlist was said to be instrumental in
bringing various North Ea st insurgent groups under one
umbrella. In March this year, home minister P Chidam-
baram told the Rajya Sabha that some foreign funds
to NGOs were being diverted to terror groups. Writes
Rajiv Malhotra in Breaking India, a book co-authored
by him: Indias integrity is being undermined by three
global networks that have well-established operating
bases inside India: (i) Islamic radicalism linked to Paki-
stan, (ii) Maoists and Marxist radicals supported by
China via intermediaries such as Nepal, and (iii) Dra-
vidian and Da lit identity sep aratism bei ng fostered by
the West in the name of human rights.
The KudankulamNuclear Power Plant
All these str eams are being intel lectual ly and finan-
cially supported by foreign donors with vested inter-
ests. Former Indian diplomat Arundhati Ghose agrees.
There are many examples to show how some of these
foreign-funded NGOs are harmful for the nation and
playing into foreign ha nds. Her own nephew and NGO
activist Sanjay Ghosh was killed by the ULFA in Assam.
She wrote in an article, There is a veritable industry of
human rights organisations. These NGOs are powerful,
as they are given almost equal speaking time on any
subject on the agenda in the UN bodies. They offer their
platforms to wanted terrorists of India. Anoop Chetia ofULFA was given a chance to speak by a UK-based NGO
Liberation. There appears to be no dearth of funding
for these organisations.
There are, of course, some who are seriously con-
cerned with human rights violations if only by the
state and base their charge on well documented or
well researc hed situations.
There are NGOs that are funded, directly or indirectly,
by governments to project their own governments point
of view. There are groups
who regularly brief their
government representatives,
before and during meetings
and who sometimes act as
domestic pressure groups on
the government concerned to
raise a particular issue about
a particular country.
The government, keep-
ing in mind the large scale
growth of registered NGOs
along with quantum leaps
in the amount of foreign
contribution coupled with
a changed internal security
scenario and spread of use of communication and in-
formation technology, has gone in for changes in FCRA
which were ena cted in 1976 and was last a mended in
1984. Thus the Foreign Contribution (Regulation) Rules,
2011 was made under section 48 of FCRA, 2010. Strin-
gent provisions have been made in the FCRA, 2010, in
order to prevent misutilisation of foreign contributions.
States the ministry of home affairs, The focus of the
act is to ensure that the foreign contribution and foreign
hospitality is not utilised to affect or influence electoralpolitics, public servants, judges and other people work-
ing in important areas of national life like journalists,
printers and publishers of newspapers.
The Act also seeks to regulate flow of foreign funds to
voluntary orga nisations with the object ive of preventing
any possible diversion of such funds towards activities
detrimental to national interest and to ensure that in-
dividuals and organisations may function i
consistent with the values of the sovereign
republic. In addition, the new law has stipu
year validit y for all associations regis tered e
away with the concept of a permanent re
The act regulates acceptance of foreign
by certain individuals, which includes m
legislature, office-bearers of a political pa
government servants or employees of any c
while v isiting any countr y or ter ritory ou
Such individuals can receive foreign hosp
with the pr ior permission of the c entral goAccording to sources in the MHA
tral government has sent letters to sta
ments to take strict actions against
NGOs. The results have been immediate: the
a declining trend in foreign funds. While
21,508 associations had reported receipt of
tribution amounting to Rs. 10,337.53 crore
only 14,779 NGOs reported receipts of Rs 78
of foreign funds.
All told, the voluntar y movement itself h
some famous household names: Medha Pa
Setalvad, Sunderlal Bahuguna and Arundhat
are others who opt for a hard li fe and work
completely anonymous. They are the hero
NGOs arepOwerful,aNd GiveN
almOstequal
speakiNGtime
ON aNysubject at
the uN
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14 governance watch May-June 2012 May-June 2012 governan
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The remark by the Prime Minister
of India to a magazine blaming
foreign NGOs for protests in In-
dia against nuclear reactors and
GM crops is diversionary and disturbing.
You cannot allege that the views a nd
concerns of local residents, are suspect
and that Indian citizens are manipulated
by foreign funds. The alleged involve-
ment of foreign NGOs/ or foreign funds
being used in the Kudankulam protests
is a red herring. Nuclear energy is a hotly
debated and contentious issue all over
the world. Even in countries like Japan,
where a significant percentage of the
energy comes from nuclear power, local
residents have strongly protested and
caused a review of what was considered
a successful nuclear energy programme.
To blame a foreign hand for the Ku-
dankulam protests is therefore to delib-
erately divert the issue.
Kudankulam is in fact an example
of a non-violent, democratic peoples
protest. The movement is demanding
a thorough review of the process of
sanction and running of nuclear power
plants. While there might be some for-
eign funded NGOs working on issues of
environmental awareness, the partici-pation of people and the extent of the
protests demonstrates how rooted and
indigenous it is. In fact, following the
Prime Ministers statement, there have
been unethical and uncalled for harass-
ment of NGOs by the State, who were in
no way involved in the protest.
To ascribe Indian opinion to a for-
eign hand is under estimating the in-
telligence and the participation of In-
dians in the democratic process. It is
unimaginable that the Prime Minister
of a big democratic country like India
should be worried about a small sum
of money going to some NGOs. The net
result is that even organisations engag-
ing in just development work are being
harassed by government agencies. It is
also an indication of the double stan-
dards of globalisation. Ironically, on the
nuclear issue, the biggest influence of
foreign funds and the foreign hand are
the pro- nuclear corporations, and the
US government which openly lobbied
with Indian political par ties in favour
of the controversial nuclear agreement.
Why cant international experience of
the anti- nuclear movement be a legiti-
mate part of the debate?
Currently, the nuclear regulatory
the Net result
is that eveN
OrGaNisatiONs
that eNGaGe iNpure develOpmeNt
wOrk are beiNG
harassed by
GOverNmeNt
aGeNcies
NOw NGOsbear the
burNtOf GOvt
aGeNcies
bill is trying to insert a secrecy clause
against the spirit of transparency and
the peoples right to information en-
shrined in the RTI Act and the Indian
Constitution. A similar clause is being
inserted in the bio technology regula-
tory bill. We would like to clarify, that
the Mazdoor Kisan Shakti Sangathan
(MKSS) of which I am a member is not
an NGO.
It is a peoples collective, that operates
on indigenous personal contributionsand our accounts are transparent and
accessible on our website for all to see.
We participate in peoples campaigns
and movements and see ourselves as
part of the non party political process.
Therefore, I am not conversant with
what the NGO sector thinks of the gov-
ernment attitude to them and vice versa.
The MKSS firmly believes in democratic
procedures and systems, the constitution
and the role of parliament in legislating.
At the same time, as a people movement,
we feel it is important to engage with
the State to bring issues to their atten-
tion, and do whatever we can to insist
on transparency, accountability and de-
livery of essential goods and services
from the government.
The only way to combat this alleged
misuse of funds is to insist on a regime
of transparency across the board, wheth-
er it is government spending, or NGO
spending, or even corporate investments,
which are claimed to be in national in-
terest. It is of critical importance that
complete transparency be maintained
by all the participants in this debate:
by the NGOs, by the Government, by
the movement, and most importantly
by the nuclear establishment.
I do feel that there has been a sys-
tematic clamping down of democratic
space available for dissent in this coun-
try. Everybody must be allowed to place
their views and opinions in the publicdomain, and debate the pros and cons of
each issue whether of nuclear energy
or GM crops, instead of subverting these
issues by raising red herrings.
(Roy is political and social activist
who founded and heads the Mazdoor
Kisan Shakti Sangathana.)
column aruna roy
The roots of volunteerism lie in
the very ethos of the Indian
tradition, culture and under-
standing. Every religious stream
regardless of its antiquity and regional
affiliations has embedded within its
fabric the elements of tolerance, peace,
service and values and these are the val-
ues and tenets which are broadly applied
by civil society organisations, including
the NGOs.
The growth, evolution and develop-
ment over the years of the NGOs has
been debated, contested and often ap-
preciated based on their relationship
with the establishment. Given the si ze
and role that NGOs play in Indian de-
velopment, the importance of the sector
has only grown due to grassroots inter-
vention and various initiatives to em-
power citizens. Lately the role of NGOs
in streamlining their public awareness
campaigns on a range of issues including
to sensitise public on fighting corruption,
environmental violations by the govern-
ment and corporate sector and fixing ac-
countability of the government to provide
effective delivery mechanisms to serve
people better, have been redefining the
state and NGO relationship in the recentpast. Some events following these do
not augur well for democratic traditions
and vibrant democracy that India is.
India currently is the worlds largest
capital, housing nearly million NGOs of
all types and kinds dotting every nook
and corner in the country and undertak-
ing various activities that range from
spreading awareness through advocacy,
delivery of essential services to fight-
ing against corruption, inefficiency of
the establishment, human rights and
whistle blowing a gainst the system.
Lately, NGOs nuanced stand against
the nuclear power plant in Tamil Nadu
seems to have sparked a fresh row on its
utility for people of the state dividing the
establishment and the NGOs starkly.
If one were to follow the contours of
the relationship between the establish-
ment and the NGOs over a long period
of time, one would notice a trend that is
hard to ignore. The trend has bee n one
of cosiness at times and at other times
adversarial. There are also instances
where the state collaborated with the
NGOs and an equal number of instances
where the t wo came face to face with
each other. Some examples where the
two came to collaborate include working
Getstate,
GrOupsON ONe
platfOrm
together on developmental
resources being contributed
and where the two sides c
face where the state was ch
the NGOs on the issue of
ment of FCRA in 2007 wh
decided to repeal the 1976
legislation that triggered
whole range of issues, th
again taking a nuanced sta
Some of such example
that the relationship betweand the NGOs has been dr
tual convenience and co-o
process many NGOs blame
having failed to have defin
tionship between the two,
the state has done vis-a-vi
rate sector. Over the years
been several attempts ma
about reconciliation betwe
and NGOs, but not succes
One of the best attempts m
direction has been from t
Commission, which on seve
provided both support and
the NGOs to leverage the re
further build up its cross sec
with other minist ries and
departments.
In March 2000, the Plann
sion was declared as a nod
the interface between state
2007, it came up with a na
on voluntary sector, which
tially written by senior NGO
als in the country.
The commission also st
society window to give sp
voices and take their inputs
and development of various
tric schemes. It also provid
a mechanism to enrol them
website of the Planning Co
be able to have access var
ment grants. Efforts were
volve civil society organisadeciding the plan documen
put them through the financ
enable them to articulate t
tives on development issue
budget.
(Pandey is executive
Global Compact Net
Over the years,
there have beeN
several attempts
made tOrecONcile the
state aNd NGOs,
but NO success
has beeN achieved
sO far
column Pooran chandra Pandey
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16 governance watch May-June 2012 May-June 2012 governan
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You may think that the most cor-
rupt organisations in India be-
long to the government? But you
may be wrong, because some of
the biggest scammers in this country
could be the non-governmental organi-
sations, or NGOs, and it is all done in
the name of the poor of India.
In the old days, leaders of NGOs used
to work in the field, dressed simply, lived
in humble dwellings and had minimal
salaries, sufficient for their most essen-
tial needs. But today the new breed of
NGOs you meet in Del hi or Bombay, is
smartly dressed in jeans, he or she usu-
ally comes from Indias upper elite class,
carry the latest laptop and often travel
around in air conditioned cars. These
NGOs spend half of their time abroad,
in London, Paris, or New York, doing
smart presentations, with mesmerising
slides and excel spreadsheets, in front
of gullible westerners, always ready to
shed a tear for the poor downtrodden
Indians, so as to convince them to grant
more funds.
And what is usually all about? Seventy
per cent of the time woman empower-
ment, or uplifting the villagers. It isnowadays fashionable in India to high-
light the downtrodden Indian women
and their underprivileged place in
Indian society. But no country in the
world has granted such an important
place to women in its spirituality and
social ethos. And even today, behind
all appearances arranged marriages,
submission to men, preference of male
children in some rural areas (but girls
are loved in India like nowhere in the
world) - it can be safely said that very
often, from the poorest to the richest
classes, women control even if behind
the scenes a lot of the family affairs:
the education of their children (men in
India are often mamas boys), mon-
etary concerns, and husbands often refer
to them for important decisions.
Countries such as France or the US,
who are often preaching India on wom-
ens rights have never had a woman as
their top leader, whereas India had In-
dira Gandhi ruling with an iron hand for
nearly 20 years and proportionately they
have lesser number of MPs than India,
which is considering earmarking 33 per
cent of seats in Parliament for women,
a revolution in human history!
selliNGiNdias
pOvertytO make
bucks
But this obsession of NGOs with
women and village e mpowerment has
completely eclipsed the burning issue
that would require NGOs attention with
the tremendous amount of funds they
attract from abroad : afforestation, as
there are hardly any forest worth the
name left today in India. Take the Hi-
malayas for instance, and a region like
the lovely Kumaon hills. Less than 40
years ago, people in Almora, the ancient
capital of the Kumaons, still rememberthe beautiful blue cedars forests. Today,
there are no forests left around Al mora
- they were cut down i n the early 1970s
by contractors from the plains with the
full knowledge of the government - ex-
cept commercial pine forests, which
impoverish the soil and do not hold it
properly. Yet, there is terrible shortage of
water in Almora, the climate has
warmed-up considerably in the last 20
years and wood is fearfully expensive.
There are literally hundreds of NGOs
in the Kumaon hills, who are doing lots
of women empowerment, lots of vil-
lage uplifting, lots of weaving this and
weaving that but absolutely no tree
planting. Why? Because the others do
not do it, is the usual answer, when
you ask some of the NGOs or:because
it is too hard work. But the beauty of
the Kumaon hills around Almora is fast
vanishing: more and more hotels are
coming up, cutting more trees, like near
the Kassar Devi temple, above Almora,
where Vivekananda is supposed to have
meditated and which has been bought
to make into a resort by a non- resident
Muslim who is suspected to have links
with Ibrahim Dawood.
Most of the NGOs are funded by
western countries but what is not al-
ways known is that they often get the
bulk of their budgets from big Christian
organisations such as Christian Air or
Oxfam. Medha Patkar, for instance, hasto her credit the Right Livelihood Award,
the Rev. MA Thomas National Human
Rights Award and others awards.
(Gautier is editor-in-chief of the
Paris-based La Rev ue de
lInde (harmattan.fr) and the author of
A New History of India.)
it has becOme
fashiONable iN
iNdia tO hiGhliGht
the dOwNtrOddeNwOmeN aNd their
uNderprivileGed
place iN iNdiaN
sOciety whereas
this is NOt
column Franois Gautier
The Indian voluntary sector (or
the NGO sector) is emerging to
be a credible force in catalysing
social and economic growth,
particularly for masses at the bottom
of the economic pyramid. The potential
for this is apparent from the exper ience
of other developed economies. If India
is to achieve, as is predicted, the living
standards of the developed world by
2050, then the NGO sector would need
to play a critical role and must grow at
a pace much higher than that required
of the overall Indian economy. Within
India there are about 3.2 million regis-
tered NGOs, of which an e stimated 1.5
million are active.
ExistiNg LEgAL FRAmEwoRk
The right of all citizens to form associa-
tions or unions is guaranteed under Arti-
cle 19(1) (c) of the Constitution of India.
Charitable organisations usually take a
legal status in the form of a Trust, Soci-
ety, or non-profit company (also called
not-for-profit organisations or NGOs),
and are regulated by a variety of state
and central government agencies, laws
and authorities. The federal and statelaws (Many states also have their own
Public Trusts Acts) which are applicable
to charitable organisations.
Ngo sECtoR - shoRtComiNgs
iN thE PREsENt sEt-uP
By its nature the voluntary sector has
an extremely philanthropic side to it,
thus making it difficult for corporate-
like professionalism or profit-driven
accountability-standards to take prece-
dence over its core functions. However,
like other key sectors of India, the volun-
tary sector is also faced with imposing
evolutionary and market challenges.
Hence, issues of internal control mecha-
nisms, professionalism, accountability,
transparency and financial management
must be given impetus.
Evidently, there is both a need for a
pertinent shift in the manner of how the
voluntary sector views governance and
regulatory frameworks. Equally impor-
tant is to create competencies for better
risk management through operational
means and management procedures for
risk monitoring and risk mitigation. In
case of the NGOs, more so than for the
corporates, the risks often take the shape
column KPc rao
half Ofthe 3.2
milliONNGOs
active
of vulnerability to influen
dynamics ranging across:
a. Lack of or limited acce
sional management expert
b. Financial inefficiencies a
tices
c. Vested organised crime
interests
d. Extremism and terrorism
NEEd FoR good gov
PRACtiCEs
Therefore, the policy maker
top priority to regulate th
tor by introducing a regul
work to bring in the tr ans
accountability in this volu
Some of the areas where
ment needs to intervene a
below:
a. Financial prudence
b. Internal control mechan
c. Management efficiencie
d. Prone to money launde
tions
e. Internal control checks i
tions of NGOs
f. Misuse of the image of N
mistrust
g. Bridging the gap betwe
level management and gr
volunteers
h. Strategic leadership to pr
guidance
CoNCLusioN
Concerns have been raise
do not spend adequate amo
core objects. There isnt en
parency in the administr
trusts, resulting in dispro
high administrative expen
lated non-profit organsat
activities in the past have
the conduits for money la
organised crime. Global pr
growing on India to act urgenancial Action Task Force (
its report identified fund tr
foreign NPOs as one of the m
for terrorist financing in th
par with counterfeiting of cu
trafficking and extortion.
(Roa is an expert o
the vOluNtary
sectOr is alsO
faced with
impOsiNGevOlutiONary aNd
market
challeNGes heNce,
issues Of iNterNal
cONtrOl
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18 governance watch May-June 2012 May-June 2012 governan
cover story
Maja Daruwala, the execu-
tive director of the Com-monwealth Human Rights
Initiative, an international
NGO based in New Delhi, suggests
officials not to tar everyone with the
same brush. Excerpts:
Prime Minister Manmohan
Singh had blamed US-based
NGOs for engineering protes ts
against nuclear reactors in Koo-
dankulam. How do you see it?
When a Prime Minister speaks we
have to imagine that what is said is
well founded. But the claim is a very
specific one that indicates a delib-
erate move specifically US based
NGOs and a deliberate plan to
engineer. This notion having
been dropped into the public mind
as an accusation of ulterior moti-
vation and manipulat ion of policy
is left dangling without further
proof. The subtext is that there is
something wrong something de-
vious. But that is ha rdly t he is sue.
From senior chief executive officers
(CEOs) of countries to secretaries of
state, all try to influence policy. In-
ternational solidarity in doing so is
not forbidden or considered morally
wrong. It is just something that has
to be known and has to be legal. If
these two elements are there while
we may not approve of support from
foreigners, one should not ideally leta drop of poisonous innuendo drop
into public consciousness and then
let it remain there.
The thing is to follow through - also
openly and without victimisation or
targeting because one finds the ac-
tions of a or b inconvenient. After all
it is the Indian citizenry that is in
protest mode not some strangers in
the land.
What do you think about the
Indian governments policy to-
wards NGOs?
In recent times there has indeed
been a tightening across the board.
The new foreign contribution law and
the income tax law do disadvantage
to the sector. The sector feels it is
necessary to regulate just as one
would regulate the corporate sector
or the inflow of FDIs or even the in-
dividual inflow of funds. But there
is a subtle difference in regulation
and control. I think there is a ten-
dency to the latter. This is based on
a subterranean suspicion of the sec-
tor as being too vociferous too vocal
and proliferating and the tendency of
government to hold the cards in its
hands and use it when necessary.
The sector has been saying in re-
gard to foreign funds that it should be
regulated under the FEMA. You bring
money in through official means
it can be monitored and that is that;
good for the goose good for the gan-
der. The government has resolutelyrefused to do this, citing undesirable
activities and groups that do not use
the money for the purposes that they
should. Amongst a billion people the
activities of some will always look un-
desirable to others. Conversion in one
instance; but the issue is not whether
we like it or not. Individuals are free
to convert and be converted. The
issue: is the activity illegal? If an
activity is illegal the group or as-
sociation whether they are a politi-
cal party or they are an unregistered
association a gang of robbers or a
money laundering cartel, it doesnt
matter.
Their activities funded or not as-
sociated with an NGO name or not
are illegal. T he problem with the new
NGO law is that it is full of wide dis-
cretions and vaguely worded defini-
tion of political activities and cum-
bersome processes for registration.
All this combines to create asheathed weapon or a Damocles
sword hanging over everyone who
associates for a cause; any time a
government functionary wants to act
against someone he can and so it acts
in terrorism. This is bad whether it
applies to NGOs or corporates or in-
dividuals. Law must be clear, simple
with simple processes that ever yone
can comply with. Law must make it
easy to obey and to tend toward not
so difficult that people tend to illegal-
ity. When this law combines with the
new income tax code which makes it
hard for NGOs to sustain themselves
through honest activity, it does look
as if the government would like to
discourage the proliferation of civil
society groups.
On the other hand we do have a lotof groups and it is necessary to have a
system of regulation, but it just has to
be honest, fair and equally applicable
to all and encouraging of the constitu-
tional right to associate; associate here
in the country and across borders in
international solidarity of purpose.
The Govt has started
taking action against
non-reporting NGOs
registered under
FCRA.
Non-reporting is an of-
fence If the government
is being even handed,
giving time to compoundand right the wrongs if
there are any, then that
is fine. If the government
is doing it selectively be-
cause something an NGO
has done recently is not
to their liking, then even
though the government
has every right to check up
on the legality and com-
pliance of regulations by
that NGO, it does smack
of vindictiveness. Also the
degree of consequence
matters; if the infraction
by the NGO can be sorted
out with self correction
in a time frame, then let
that take place; if it merits
a penalty or fine let that
take place, but one need
not go for the harshest
punishment when for all these years
nothing has been done by government
to assist the NGO to comply. Were no-
tices sent? Were they disobeyed? And
so on. One would hope that the same
standard of compliance is required of
NGOs as of corporates at every level,
proprietorial shops and political par-
ties. Even handedness does tend to
create a sense amongst all that the
law should be obeyed.
There are allegations thatsome NGOs suppor t insur gent
groups i n the name of human
rights. Your comment.
Allegations are easy to bandy about
and they have the effect that is desired
of them. Repeat a lie several times
and folks will start believing it. We
have many such allegatio
turned into prejudice; ab
about minorities, about c
groups, I have no idea i
groups or right wing relig
or political extremists and
in the fringes of political
fronts to garner support.
is properly, regularly, traand honestly regulated i
easy to find out whethe
receiving support (not on
were illegal permissible o
absence of an India wide
works in st andard fashi
be ruled by allegation an
and not by law.
Do you think some
misusing foreign fu
their own purposes, w
against national inte
As stated above I have n
is a diverse country. The
a Hindu country; the Ma
another kind of rule; the C
allows both points of view
through the democratic
which one is anti- nati on
Also what exact ly is n
terest? Is a model of de
based on big dams more a
than one based on small d
know and dont want to c
this. You have to be very
or y is actually using fund
for an anti-national purp
channels and are in fact
for this. You dont only h
foreign funds to use the
national purposes. Suppo
millions gathered in the na
individual that is popul
public at large - what is theven if you dont like the
Suppose half the money
X gets i s from his congre
the other half is from fo
the world to promote som
thing like the world is fla
sin to eat wheat flour!
defiNitiON OfaNti-NatiONalNGO uNclear
law must be clear
with simple
prOcesses that
everyONe caN
cOmply with.
law must make it
easy fOr citizeNs
tO Obey aNd GO
fOward
interviewmaja daruwala
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20 governance watch May-June 2012 May-June 2012 governan
cover story
Sanjeev Nayyar, management
consultant, talks on the role
of NGOs. He says NGOs could
stimulate thought by undertak-
ing original, innovative research and
follow up action in a socio-cultural-
environmental-education context.
Pratham is a very successful NGO in
the education space.
They can become a useful vehicle f or
well off citizens to shar e their wealth,
those who are looking for a private not
government-sponsored effort. Or the
Friends of Tribal which runs a teacher
school in tribal areas. The problem aris-
es when NGOs become branches of the
global network. It is natural then that
their mission and thought would be in
line with that of the parent.
Does India have a policy on
NGOs?
The central government has no policy
towards NGOs. As long as NGOs are
sympathetic to and work in tandem
with the party in power, it is fine. The
minute they cross the Laxman Rekha,
the government comes down heavily,
for eg Koodankulam.
I call it a Laissez faire policy. Prime
Minister Manmohan Singh blamed US-
based NGOs for engineering protestsagainst nuclear reactors in Koodanku-
lam. Tamil Nadu and Chennai district
have been amongst the largest recipi-
ents of foreign money for many years
now. This was known to the govern-
ment all along. So why has the PMO
woken up to the perils of foreign mon-
ey now? Because foreign
money has been used to
delay commissioning the
Koodankulam nuclear
power plant? As we have
seen in the past, any policy
matter that has the words
nuclear, such as the Indo-
US Nuclear deal, makes
the Prime Minister un-
naturally assertive and
stubborn, notwithstand-
ing threats from UPA allies.
Do you think some NGOs are
misusing foreign funds in India
for their own purposes?
The top three donor countries for
many years have been USA, Germany,
and UK. Remittances from the U.S.
Between 2002-03 and 2009-10 have
nearly doubled (Rs 1,680 to Rs 3,106
crs). Spain and Italy are in dire eco-
nomic straits, Britain had a fiscal deficit
of 11 per cent of GDP in 2009-10 yet
they remitted over Rs 1,000 crores to
Indian NGOs per annum.
economic downturn, the w
tinued contributions to In
A reading of the top 15 do
cipients might provide som
There are reports that NGO
ing money and using it for a
purposes in Maoist-hit ar
and Kashmir, North Eas
insurgency-prone regions
The Ministry of Home A
grants approval to an NGO
of funds from abroad and th
collates audited receipts an
accounts, balance sheet et
The MHA scrutinises re
sure that contributions hav
used. During 2009-10, only
of foreign contribution rec
their annual returns withTherefore, the govern
not even report the actua
contributions received by N
are 38,000 odd registered
with MHA. Is it possible f
to monitor utilisation o
activities?
sOme GlObalNGOs waNt
tO partitiON
iNdia
GOvt wakestO the perils
Of fOreiGN
mONey
Rajiv Malhotra serves on the
board of governors of the India
Studies Programme at the in-
ternationally famed University
of Massachusetts and served as chair-
man for the Asian Studies Education
Committee of the state of New Jersey.
Besides his work, he has co-authored
Breaking India an inside account of
the role of global NGOs that is a must
read for the government officials who
have plans to make the whole business
of running NGOs more transparent.
What is the role of NGOs in
nation building in India and
worldwide?
NGOs play a very important role in
building nations and societies. The true
spirit of an NGO should be local com-
munity organisation for self-help, with
links to groups elsewhere only for large
projects. But this should not be driven
by foreign-based NGOs. India ought to
be self sufficient in the NGO sector or
else will outsource its sovereignty to
others.
Does the Indian government
have a policy on NGOs?
It does not do enough due diligence
on direct and indirect foreign funds. Itgets involved only after a problems is
at hand, like treating a heart patient
only after the attack and doing nothing
preventive.
Prime Minister Manmohan Singh
accused US-based NGOs for engineer-
ing protests against nuclear reactors in
Koodankulam.
It was good that the gov-
ernment finally woke up.
But why only in isolated
cases and why only after
it has happened?
Do you think some
NGOs are misusing
foreign funds?
Yes, my book, Breaking
India goes into detail. Its
not just the money, but the ideological
spin, anti-national training camps and
building foreign-inspired vote banks in
the countrys vulnerable sectors.
Some NGOs are diverting money
and using it for anti-national purposes
in Maoist areas, Jammu and Kashmir
other insurgency-prone regions. These
reports are true. But the problem is far
worse and no longer isolated to a few
places. You find this in the rich far mlands
of Punjab as well.
What about the new law?
Its a reporting requirement. Reports
of activities get slanted to make them
look benign. If the report says `educa-
tion or youth empowerment training ,
how does it indicate whether the educa-
tion is one filled with hatred towards
fellow Indians? How does it indicate
that youth training is aimed at promot-
ing separatist identities? These report-
ing requirements are easily fooled.
Any suggestions?
They should read my book and ap-
point a commission to start investiga-
tions. But that will be tough because
there are many spoiled brats.
The Indian government should put on
the table all diplomatic dealings with
western nations connected to NGOs and
set up its equivalent of the Ford Founda-
tion. Get these neo-rich billionaires tostart funding along the lines of what
the big Americans did for their country.
All foreign supported NGOs (including
churches and madrassas) should be de-
listed as minorities because they should
be classified as branch offices of foreign
MNCs. That is the way ahead.
interviewrajiv malhotra interviewsanjeev nayyar
as lONG as NGOs
wOrk iN taNdem
with the party iN
pOwer, it is fiNe.the miNute they
crOss the laxmaN
rekha, there is
trOuble ahead
fOr them
the GOverNmeNt
has NOt dONe
eNOuGh duediliGeNce ON
direct aNd
iNdirect fOreiGN
fuNdiNG aNd it is
daNGerOus