The Ministry of Home Affairs (MHA) has instructed all non-governmental organizations (NGOs) registered under the Foreign Contribution (Regulation) Act (FCRA), 2010 to report any changes in their key office bearers and members.
More on the news
This requirement still applies even if an NGO’s previous FCRA license application is still pending.
NGOs may submit a new application, which will automatically replace the previous one.
Registrations of several NGOs have been cancelled in the past years for violations under the act, raising questions over their functioning.
What are NGOs and how are they regulated in India?
A non-governmental organization (NGO) is a non-profit organization, group or institution that operates independently from a Government and has humanitarian or development objectives.
NGOs in India are formed under-
Societies: Registered under the Societies Registration Act 1860.
Trusts:
Private trusts are registered under the central government’s Indian Trusts Act, 1882.
Public trusts are registered under the state legislation concerned.
Charitable companies: Registered as non-profit companies under Section 8 of Companies Act, 2013.
NGOs receiving foreign contribution/ donation need to mandatorily obtain prior permission for an FCRA registration license from the Ministry of Home Affairs (MHA) under FCRA, 2010.
Regulation of NGOs under Foreign Contribution (Regulation) Act, 2010 (FCRA)
It regulates the influx of foreign contributions or funds given to individuals, associations or companies, including NGOs.
The Act restricts the use of foreign funding for purposes that may affect- nation’s sovereignty and integrity; security, strategic, scientific or economic interest; public interest etc. or may lead to incitement of an offence or endanger the life of any person.
It was amended in 2020 under Foreign Contribution (Regulation) Amendment Act, 2020, with the following key changes to prevent misuse of funds by foreign funded NGOs-
Mandated receiving Foreign contribution through a specified bank in an designated "FCRA Account”.
Prohibited the transfer of foreign contributions to other person.
Reduced the ceiling on foreign contributions being used for administrative expenditure from 50% to 20%.
Empowered Central Government to-
Direct persons receiving foreign funding to not utilise it or receive any further funding after conducting a summary inquiry.
Require Aadhaar number, etc., as identification document for office bearers, directors and key functionaries
Roles and Responsibilities of NGOs
Governance:
Strengthening democracy and governance: E.g.,Association for Democratic Reforms (ADR) works in the area of Electoral and Political Reforms.
Their Public Interest Litigation (PIL) resulted in the Supreme Court of India directing candidates to disclose their criminal records, educational qualifications, and financial assets during elections.
Supplementing Government Efforts: E.g., Akshaya Patra Foundation implements PM POSHAN Initiative to solve malnutrition.
Social upliftment and reforms:
Protecting Human Rights: E.g., Bachpan Bachao Andolan, founded by Nobel Peace Laureate Kailash Satyarthi, for protecting children from exploitation.
Women empowerment: E.g., SEWA (Self-Employed Women’s Association) supports women workers in the informal sector through training, financial services, and legal aid.
Representation of marginalized sections: E.g., Naz foundation supports people living with HIV/AIDS (PLWHA) and LGBTQIA+ community.
Naz Foundation v. Govt. of NCT of Delhi judgment eventually led to decriminalisation of homosexuality in India.
Poverty alleviation: E.g., NGO-Goonj.
Human resource development:
Education & Capacity Building: E.g., Pratham NGO, works for quality education for underprivileged children in India.
Improving Health: E.g., Médecins Sans Frontières (MSF) runs programmes in India for tuberculosis (TB), HIV and other infectious diseases, etc.
Others:
Research & Development: E.g., Oxfam
Preserving Heritage: E.g., Indian National Trust for Art and Cultural Heritage (INTACH)
Environmental Advocacy: E.g., Wildlife Trust of India
Steps taken by Government of India to promote NGOs
Provision of Funds: Central Government provides funds to State Governments/UT Administrations for implementation of welfare schemes for Women and Children such as Swadhar, Ujjawala, etc., through NGO’s.
Schemes of Ministry of Culture: Various Schemes like Cultural Function & Production Grant (CFPG), Financial Assistance to Cultural organizations with National Presence etc. aim to maximize participation in the field of promotion and conservation of art and culture
NGO darpan: It provides a unique ID to an NGO registered in the NGO Darpan portal.
Challenges/Issues related to NGOs
Functional Challenges
Potential donor-driven agendas misaligned with local contexts:
E.g., severalNGOs allegedly played a central role in introducing sex determination technologies to India.
Possible interference in economic and strategic initiatives: E.g., Kudankulam atomic energy programme has faced severe protests due to international NGOs.
Security concerns regarding misuse of funds for terrorism, radicalization etc.
Regulatory and Legal Challenges:
Strict FCRA regulations impacting operational capabilities, especially for small NGOs.
Potential financial mismanagement such as involvement in financial frauds, misutilization of funds, corrupt practices, money laundering etc
Operational Issues: High Dependence on Donors; Poor Volunteer Engagement; Technological Limitations of NGOs etc.
Recommendations for Improvement
Recommendations of Vijay Kumar Committee (2017):
Light Regulation Approach: Framework that balances oversight with operational freedom for NGOs, reducing bureaucratic hurdles and fostering a cooperative relationship with the government.
Modernized Registration Procedures: To facilitate compliance with the Income Tax Act and the Foreign Contribution Regulation Act (FCRA).
Establishment of a Nodal Body: To oversee interactions between NGOs and government entities.
Creation of comprehensive accreditation and audit framework for NGOs.
Develop Searchable Database of NGOs: To enhance transparency.
Promote volunteerism: Through educational institutional partnerships.
