NEW DELHI (Thomson Reuters Foundation) - India’s Supreme Court has directed the government to conduct an audit of over three million charities in the country, many of which have received millions of dollars of state funds, but have failed to show where the money was spent.

The top court on Tuesday criticized Prime Minister Narendra Modi’s government for not having a regulatory mechanism in place to monitor grants to non-governmental organizations (NGOs), and directed authorities to recover misspent funds and take criminal action against any fraudulent charities.

“It is unfortunate that most of the NGOs do not carry out the exercise of auditing,” said the order given by a bench headed by Chief Justice of India Jagdish Singh Khehar.

“Those NGOs who did not file their balance sheets and misused the public funds would have to face action, including civil and criminal prosecution.”

The court, which was hearing a petition by lawyer Manohar Lal Sharma to seek proper monitoring of funds to charities, ordered the government to complete the auditing of all non-profit groups and submit its report by March 31.

Less than 10 percent of the 3.3 million charities operating in the country have submitted their financial accounts as per government requirements, according to 2015 data presented to the court by the Central Bureau of Investigation.

These include NGOs which receive government funds for rural development as well as those who receive foreign donations.

Civil society organizations in India have increasingly come under government scrutiny in recent years, particularly since Modi’s right-wing nationalist Bharatiya Janata Party swept to power almost three years ago.

More than 10,000 charities have had their licenses to receive overseas donations canceled or suspended since 2014, hampering their ability to work in areas ranging from health to the environment.

Home Ministry officials say these groups have violated the Foreign Contribution Regulations Act (FCRA) by not disclosing donation details or by using foreign funds to engage in “anti-national” activities.

But many charities say the FCRA is an opaque law and preventing them accessing overseas funds is a move to quell government criticism.

Last June, a group of U.N. experts said they were stunned by the way India was applying the law to stymie its critics, adding the FCRA was “overly broad” and activities deemed political or against the economic interest of the state were vague.