Govt seeks tighter control over fund flow to NGOs
Funding routes for NGOs from domestic and foreign sources are being tightened by the government through a two-pronged measure.
By TNN |
DELHI: Funding routes for NGOs from domestic and foreign sources are being tightened by the government through a two-pronged measure. NGOs getting grants from the government may soon come under statutory audit according to proposals being firmed up by the Comptroller & Auditor General. Those getting money from abroad will have to comply with the Foreign Contribution Management and Control (FCMC) Bill that asks for re-registering of all NGOs with the government, and puts restrictions on how those foreign funds could be utilised.
Auditing the balance sheets of NGOs has been flagged by the CAG in its plans to expand the scope of statutory audit. This would mean that any NGO which receives aid from the Centre will have to open its books entirely for the government auditors. The Left parties have also supported the step, and the government may soon give its approval for the same. Speaking at a conference earlier this year, Lok Sabha Speaker Somnath Chatterjee had supported the move.
According to the CAG, ���The increased reliance on NGOs for implementing development projects and welfare activities poses a new challenge to auditors to audit their accounts for ensuring accountability.��� Simultaneously, the home ministry has mooted a new bill to replace the Foreign Currency Regulation Act (FCRA) of 1976. The ministry feels that there are too many loopholes in the FCRA Act which could be exploited by terrorist organisations to funnel money into the country.
But Pooran Chandra Pandey, CEO of Voluntary Action Network of India, an umbrella organisation for NGOs, says that it is incorrect to presume that terrorist funding comes through regular banking channels and from internationally recognised donors. ���We feel there are various other apparatus through which the government can tighten the noose around those who are caught misusing funds received for development activities,��� Mr Pandey said.
The government is particularly concerned about such finance landing up in disturbed areas like Jammu & Kashmir. The bill has accordingly proposed that NGOs must be asked to renew their registration every five years, instead of a life long mandate, under the present rules. The FCMC bill was supposed to be introduced in the monsoon session, but is now deferred to the winter session of Parliament.
Auditing the balance sheets of NGOs has been flagged by the CAG in its plans to expand the scope of statutory audit. This would mean that any NGO which receives aid from the Centre will have to open its books entirely for the government auditors. The Left parties have also supported the step, and the government may soon give its approval for the same. Speaking at a conference earlier this year, Lok Sabha Speaker Somnath Chatterjee had supported the move.
According to the CAG, ���The increased reliance on NGOs for implementing development projects and welfare activities poses a new challenge to auditors to audit their accounts for ensuring accountability.��� Simultaneously, the home ministry has mooted a new bill to replace the Foreign Currency Regulation Act (FCRA) of 1976. The ministry feels that there are too many loopholes in the FCRA Act which could be exploited by terrorist organisations to funnel money into the country.
But Pooran Chandra Pandey, CEO of Voluntary Action Network of India, an umbrella organisation for NGOs, says that it is incorrect to presume that terrorist funding comes through regular banking channels and from internationally recognised donors. ���We feel there are various other apparatus through which the government can tighten the noose around those who are caught misusing funds received for development activities,��� Mr Pandey said.
The government is particularly concerned about such finance landing up in disturbed areas like Jammu & Kashmir. The bill has accordingly proposed that NGOs must be asked to renew their registration every five years, instead of a life long mandate, under the present rules. The FCMC bill was supposed to be introduced in the monsoon session, but is now deferred to the winter session of Parliament.
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