Unaccounted flow of funds to NGOs a ‘major problem’: SC
Startled by the number of NGOs operating in
India, Supreme Court has decided to lay down a legal framework to regulate
their funding, spending and working. The court, in this regard, may also
consider asking the Law Commission of India to bring an effective law to
regulate the flow of money to NGOs.
Why?
According to the court, regulation of funds
flowing to NGOs has become a major problem. NGOs in India are getting money
from all over the world. Yet, there has not been any comprehensive law to deal
with this.
Implications:
This could spell trouble for many NGOs as the
Centre has initiated a process to examine which NGO received what amount from
foreign sources and whether they had been permitted to receive monetary
assistance from abroad under the Foreign Contribution Regulation Act (FCRA).
Why a law in this regard is necessary?
- In some States, the laws do not even provide for the NGOs to be transparent about their financial dealings.
- In the Union Territories, of a total of 82,250 NGOs registered and functioning, only 50 file their returns.
- New Delhi has the highest number of registered NGOs among the Union Territories at 76,566. But none of these organisations submit returns.
- In Kerala, which has 3,69,137 NGOs, there is no legal provision to submit returns. The same is the case for Punjab with 84,752 and Rajasthan with 1.3 lakh NGOs.
- Uttar Pradesh, which has the highest number of NGOs at 5.48 lakh among 26 States, has only about 1.19 lakh filing returns.
- Tamil Nadu has about 1.55 lakh NGOs registered, however, only 20,277 file returns.
