Issue

Look where the moolah goes!

In a vast country like India, with a huge population and a corrupt system, the people at large, especially the poor, are left without the benefits of development. This happens either because of lack of proper planning for them or due to poor implementation of the various government schemes for them. To add to this, is the corruption amongst those responsible for the implementation of such schemes, forcing Prime Minister Rajiv Gandhi to comment that only ten paise out of a rupee reaches the beneficiary.
In order to uplift the poor and to give more people the benefits of development, voluntary organisations have been set up in the country. Known as the NGOs (Non-Governmental Organisations), these organisations fall into two major categories when it comes to funding—those which take funds from the government and those that depend on external agencies for funding. The funds for NGOs in the latter category come from within the country as well as from funding agencies abroad.
The NGOs can get foreign funding only after they register with the Union Ministry for Home Affairs and get Foreign Contribution by Voluntary Agencies clearance and all funding is governed by the Foreign Contribution (Regulation) Act, 1976. The aim of the Act is to ensure that the funds that come into the country for the NGO sector are not used for political activity and for dissemination of news. As such the Act prohibits candidates for election; correspondents, columnists, cartoonists, editors, owners, printers or publishers of the registered newspapers; judges,government servants or employees of any corporation; members of any legislature and political parties or office-bearers from getting such funds. Also, the NGOs have to submit their audited accounts to the Ministry every year.
In reality, it is seen that most of the provisions of the Act are violated by a large number of NGOs and the government has failed to take strong action against such NGOs and their office-bearers.
A large number of office-bearers of political parties, elected representatives and mediapersons have floated NGOs receiving foreign contribution and continue to be on their boards, in gross violation of the Act.

The last Annual Report of the Ministry of Home Affairs, for 2006-2007, states that on March 31, 2007, 33,937 NGOs were registered with it for receiving foreign contribution, but only 18,996 organisations submitted their accounts to the Ministry, reporting the receipt of Rs. 11,336.97 crore rupees, with an increase of 43.91% over the amount received the previous financial year. Some of these NGOs also reported that they had not received any foreign contribution during that financial year.
Between 1997-98 and 2006-07 a whooping Rs. 55,220.98 crore were received from foreign funding agencies by NGOs, which have submitted their accounts. The actual figure would well be more than this as 14,941 NGOs have not submitted their accounts.
Of the Rs. 11,336.97 crore received by the NGOs, an astounding Rs. 3058.48 crore amounted to establishment expenses, the largest segment of expenditure. This was followed by expenditure on relief and rehabilitation during natural calamities, amounting to Rs. 2534.23 crore.
Among the States and Union Territories, Delhi (Rs. 2183.03 crore) reported the highest receipt of foreign contribution followed by Tamil Nadu (Rs. 2117.71 crore) and Andhra Pradesh (Rs. 1,210.82 crore).
Among the districts in different states, Chennai (Rs. 908.09 crore) reported the highest receipt of foreign contribution, followed by Mumbai (Rs. 891.26 crore) and Bangalore (Rs. 628.48 crore). Santhome Trust of Kalyan, near Mumbai, received Rs. 332.86 crore, during that year, the highest by any organisation, according to the Annual Report. (See Table)
It is interesting to note that the Annual Report states, “Though, due to sustained efforts, the number of Associations reporting receipt and utilisation of foreign contribution is increasing; however, it is a matter of concern that a large number of registered Associations do not submit their statutory annual returns mandated by the law. This deficiency is being suitably addressed, to ensure that all registered Associations discharge their mandated obligation by submitting their statutory annual returns, on time.”
The Central Social Welfare Board has blacklisted a large number of NGOs for non-submission of account, misappropriation of funds, non-compliance of guidelines. But according to the department norms, these NGOs are de-blacklisted on submission of accounts. The highest number of NGOs blacklisted by the Board is in Uttar Pradesh, where the figure stands at 332, followed by Meghalaya 323, Tamil Nadu 324 and Andhra Pradesh with 287. It is clear from this that no wing of the government takes strong action against erring NGOs.
Since the funds come for the poor and the deprived in the country, there is a greater need for stringent measures to be taken to keep a tab on the way the funds are utilised by the NGOs in the country. There is not only a need to ensure that they submit their audited accounts as required under the law, but also to check that the money is put to right use.
Apart from this there should also be a social audit to see how the society or those for whom the money is meant benefit from activities carried out with such funds. Each NGO could be asked to have an ombudsman, who should be a respected person of the area, or there should be a team of such people to keep a check on the activities and the use of funds of the NGOs.
It has often been noticed that a large number of NGOs are merely on paper and the funds received by them are siphoned off either for the personal needs of the people at the helm of affairs or for political or anti-national activities of those forming such NGOs.
The Home Ministry is aware that some NGOs or their office-bearers get money in small amounts, which are not covered under the Act; this money is then siphoned off. The NDA government had sought to check the use of foreign funds received by NGOs, by a stringent law, but that was criticised by a section of social activists.
Around the same time a full page advertisement was published in a national daily alleging that a renowned NGO in the country was getting funds illegally. Another NGO had published a series of advertisements worth lakhs of rupees in national dailies, creating a campaign against the BJP at the time of the general elections. The NDA government had announced that it would probe the source of these funds, but nothing came out of it later.
After the terrorist attack on Mumbai on November 26, 2008 the Home Minister announced that a stronger law to keep a check on foreign funds coming into the country would soon be introduced.
It will not be easy for any government to take action against erring NGOs, not merely due to lack of strong political will, but also due to the ability of the NGO sector to create public opinion through the media. Any action against NGOs is made out to be an effort to stifle them.
It is not that all the NGOs are notorious. There are a large number of NGOs, who have done amazing developmental work and also maintained transparency in their accounts.
More honesty amongst the NGOs can be had if strong action is taken against the NGOs and their erring office-bearers. There also has to be transparency in the work and the accounts of the NGOs, so that the people in the geographical area of work of the NGO will also be able to keep a tab on their work.

The writer is a senior journalist .

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