Narendra Modi recently expressed concerned over NGOs indulging in anti-national activities at a high-level meeting.

In a closed-door, high-level meeting, Prime Minister Narendra Modi has asked top security officials to work with the state police to monitor how NGOs and groups suspected to be involved in anti-national activities are funded. Top sources said Modi recently expressed concerned over the subject, and that the Ministry of Home Affairs will engage with states to deal with the matter.

In the last couple of years, government agencies have brought numerous NGOs under the scanner for allegedly misappropriating funds and engaging in activities believed to be detrimental to the sovereignty of the country. Even the Supreme Court had observed last year that the Centre must frame rules to regulate government funding to NGOs. Around 30 lakh NGOs operate in India, but merely 10 percent of them file their balance sheets. This allows a large number of these organisations to freely operate without accountability and spend more than the Rs 900 crore the government grants them every year, besides the thousands of crores that pour in as foreign contributions.

“A vibrant civil society is vital for democracy, but some recent incidents in India raised suspicion over the intent of some of these NGOs said to be fighting for a cause," a top government officer said. "The apex court, too, had raised questions over transparency in civil society organisations, and a Central Bureau of Investigation report had clearly highlighted that a majority of these groups operate without any accountability. NGOs could be a tool for social change, but at the same time, this potent medium could be used for activities that may adversely affect the interests of the country.”

Article 19 (1) (C) of the Constitution of India guarantees to all citizens the right to form associations and unions, subject to reasonable restrictions in the interest of the sovereignty and integrity of India, security of the state, friendly relations with foreign nations, public order, decency and morality.

In 2017, the Supreme Court, in writ petition (CRL) No 172/2011, had directed the Government of India to frame guidelines for accreditation of NGOs, provisions for the manner in which those that receive grants must maintain their accounts and also for how the accounts of NGOs will be audited. The court had observed that guidelines must specify a procedure to initiate action to recover grants in case of defalcation, including criminal action when called for.

Robust monitoring mechanism required

The prime minister’s directive to have state police monitor the funding of NGOs and other organisations involved in anti-national activities is based on evidence that reveals huge sums circulating in the coffers of civil society groups and several organisations suspected to be involved in anti-India activities. Some like the Islamic Research Foundation headed by controversial preacher Zakir Naik were found to be using grants to radicalise youths.

NGOs are receiving nearly Rs 27,000 crore in domestic and foreign grants. According to the Ministry of Home Affairs, there are approximately 25,000 active organisations registered under The Foreign Contribution Regulation Act (FCRA), 2010. Records suggest that NGOs received foreign contributions to the tune of Rs 18,065 crore for various social, cultural, economic, educational and religious activities in 2016-17. A majority of these NGOs also received funds from companies under Corporate Social Responsibility mandated by the government.

Former senior police officer VN Rai told Firstpost that the system to monitor NGOs needs massive reform, and there has to be a clear distinction between a good civil society group and organisations that are set up primarily to siphon off money.

Rai said NGOs play a vital role in raising issues crucial for society and nation-building, and the handful of organisations involved in unwanted activities can easily be controlled by laws. "There are many NGOs doing fantastic work in the social and environmental sector," he said. "They are speaking up for the downtrodden and people living in the margins. But there are some NGOs that indulge in nefarious activities, and they may have the patronage of the government or administration of the day. The state police does monitor the working of such NGOs along with the home ministry, which keeps track of foreign funding. If the government wants, it can reform the system and install more checks and balances against NGOs working against the interest of the country."

FCRA crackdown

On 1 June, Minister of Home Affairs Rajnath Singh launched an online analytical tool to facilitate closer monitoring of the flow and use of foreign contributions organisations registered under the FCRA receive. The tool enables decision-makers in various departments of the government to scrutinise the source of the funds and their actual use in the country.

"It gives them the capacity to make data-driven and evidence-based decisions regarding the compliance of the provisions of the FCRA," the ministry had said. "It has analytical features for big data mining and data exploration. Its dashboard will be integrated with the bank accounts of FCRA-registered entities through the Public Financial Management System for updation of transactional data on a real-time basis.There are hundreds of thousands of such transactions annually, which can be monitored effectively through this tool. It will, therefore, help stakeholders in the government to better regulate acceptance and utilisation of foreign contributions."

In April, the ministry had issued notices to over 3,000 NGOs for not filing their annual returns from 2011-12 to 2016-17. Several NGOs were also found to have disappeared, including 369 in Andhra Pradesh, 431 in Uttar Pradesh, 299 in Delhi, 71 in Jharkhand, 126 in Madhya Pradesh, 519 in Maharashtra, 43 in Chhatisgarh and 262 in Bihar. Last year, the ministry had also cancelled the FCRA licences of 166 NGOs operating from Delhi, including that of the Public Health Foundation of India and the Centre for Alternative Dalit Media. Similarly, after a crackdown in Andhra Pradesh, the licences of 454 NGOs were cancelled.

Anil Chaudhary, coordinator of Delhi-based NGO INSAF, told Firstpost that the government had recently eased a few FCRA norms, with which voluntary organisations violating the rules may get away with it by paying a penalty. This move will only aid corrupt civil society groups and risk punishment for the good ones. INSAF’s FCRA licence was cancelled in 2013, and the Centre had also turned down its application for renewal, citing adverse inputs received from a security agency. In an affidavit, the government had said INSAF had violated provisions of the FCRA by transferring foreign funds to 15 non-FCRA registered NGOs and individuals who had actively campaigned against nuclear power plants and genetic modified foods.

"The fate of NGOs did not change even after the government changed from UPA to NDA," Chaudhary said. "Both governments targeted NGOs doing significant work in various fields. They need to understand that if violations can be negated by paying a meager penalty, it will help only the corrupt NGOs. On the other hand, the government and its agencies already have mechanism in place to monitor movement of funds from one account to another of all NGOs receiving foreign funds. All entries in the bank accounts are duly reported to the government. Why the government requires more and intense monitoring is beyond comprehension.”

Foreign funding allegedly used to derail projects

In June 2014, an Intelligence Bureau report had revealed that some foreign donors cleverly disguise their donations as funding for protection of human rights, getting a just deal for people displaced by projects, protection of the livelihood of indigenous people, protecting religious freedom, etc.

“A significant number of Indian NGOs (funded by some donors based in the US, UK, Germany and Netherlands) have been noticed to be using people-centric issues to create an environment that lends itself to stalling development projects," said the Intelligence Bureau report reviewed by Firstpost. "These foreign donors lead local NGOs to provide field reports, which are used to build a record against India and serve as tools for the strategic foreign policy interests of western governments. Also, Dutch government-funded NGOs have slowly shifted focus from human rights in Kashmir to the twin issues of violence against women and prevention of extractive industries in the North East."

In 2015, following reports that several NGOs were allegedly involved in anti-national activities, the government had asked spy agency Research and Analysis Wing to verify the antecedents of the donors and source of funding when the amounts exceed Rs 1 crore. The Centre had also said no foreigner can be an office-bearer or trustee in an NGO but can be associated only in an honorary capacity.

A three-tiered monitoring system

The government has argued in favor of setting up a mechanism to monitor the source of funds, which is the lifeline of voluntary organisations, and continue to monitor their expenditure. Last year, several government departments had worked out guidelines to create an enabling environment for civil society groups that could stimulate their enterprise and effectiveness and also identify mechanisms through which the government could work with voluntary organisations on the basis of mutual trust and shared responsibility while ensuring transparency and accountability. The Ministry of Rural Development had suggested uniformly instituting a three-tier monitoring mechanism for central government departments — comprising an in-house monitoring process — state-level and district-level monitoring committees as well as an independent third-party monitoring system, which may be operated by government think-tank NITI Aayog.

“Monitoring should not only look at the physical and financial aspects but also quality aspects," the ministry had suggested in its draft guidelines. "Norms should be applied for the number of visits by monitoring entities and completion of a project should be linked to satisfactory performance. Performance audit by the Comptroller and Auditor General of India, wherever necessary, at the ministry level or sector level may be done periodically. Fund-based accounting may be introduced for earmarked funds by the NGOs, and all grants received from the government should be separately accounted for.”