Govt to change registration, audit processes for NGOs

Deliberations within home ministry at an advanced stage; new guidelines expected in the next two weeks


The proposed changes come in the wake of the cancellation and suspension of licences of about 8,000 organizations, and court cases involving Greenpeace India and Teesta Setalvad’s Sabrang Trust. Photo: Hemant Mishra/Mint
The proposed changes come in the wake of the cancellation and suspension of licences of about 8,000 organizations, and court cases involving Greenpeace India and Teesta Setalvad’s Sabrang Trust. Photo: Hemant Mishra/Mint

New Delhi: The government plans to streamline the audit and registration of non-governmental organizations (NGOs) receiving foreign funding, and is expected to come out with a new set of guidelines in the next fortnight. Deliberations within the home ministry as to how processes for NGOs, particularly those receiving foreign funds, can be simplified are at an advanced stage.

The aim of the exercise is to ensure greater disintermediation of processes so that there is minimal contact with the bureaucracy. The government has been severely criticized for allegedly targeting NGOs, specially the ones receiving foreign funds.

According to a senior home ministry official, one of the key changes in the revised guidelines will be that NGOs that do not receive any foreign funding in a particular fiscal year will not be required to file a certified copy of the auditors’ report with the ministry’s foreigners division.

As of now, it is mandatory for every NGO, irrespective of whether or not they have received any foreign donations, to file the auditors’ report.

Further, NGOs that receive foreign donations will be able allowed to file the auditors’ report online. Similarly, NGOs will be allowed to file their income-tax returns online; the ministry will not insist on a hard copy, the official said, on condition of anonymity.

“We had sought responses from all stakeholders as to how the functioning of NGOs could be made easier. Based on the feedback, we are going to make changes to the Foreign Contribution (Regulation) Rules (FCRR), 2011, under which NGOs receive foreign funds. We are going to cut down drastically on the paperwork required for registration of new NGOs and even renewal of licences. We are working on the fine print and will finalize it very soon,” the official said.

“Even the security checks done by multiple agencies at the time of registration or renewal of licence for a foreign-funded NGO will be cut down. As of now, various agencies at the central and state levels do this, but under the new arrangement, Intelligence Bureau will be the only nodal agency for the security clearance so that the process is expedited,” he added.

The proposed amendments come in the wake of the home ministry’s cancellation and suspension of licences, under the Foreign Contribution (Regulation) Act (FCRA), of approximately 8,000 organizations, and recent court cases involving Greenpeace India and Teesta Setalvad’s Sabrang Trust.

“We commend the reform process being brought about by the ministry,” said Arjun Phillip, spokesperson of Voluntary Action Network India (VANI), an NGO focused on promoting volunteerism and which also calls itself an umbrella organisation for not-for-profit organisations.

“Currently, the discussion or proposals for amendment of FCRR are pure speculation, as we have had no official intimation from the ministry. However, if the government does succeed in reducing complexities like the number of forms, physical copies of tax returns, etc., it will help NGOs,” he added.

Cautioning against the ministry’s aim to move applications and submissions online, Phillip said, “As an advocacy network for grassroots organizations we feel everything moving online will be a challenge. There are many who have no access to regular or strong networks in far-flung areas of operations, so this is something the government must take into account when setting deadlines for submissions.”

Most not-for-profit organizations are wary of commenting on the developments within the home ministry’s foreigners division.

As Venkatesh Nayak, programme coordinator at Commonwealth Human Rights Initiative, said, “In July, when the ministry published the draft amendment Foreign Contribution Regulation Rules, a number of submissions were made from civil society organizations. Currently, we do not know what has been accepted, rejected or modified, and therefore cannot comment.”

He added that civil society organizations that have been witnessing greater scrutiny over the past year have been at the receiving end of the arbitrary use of the FCRA.

“Time and again, whenever the Act has been used to either freeze organizations’ bank accounts or cancel their registration for receipt of funds from abroad, the courts have decided in favour of the organizations, the latest instance being the stay on FCRA licence cancellation of Greenpeace India by the Madras high court,” he said.

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