Prelims level : Governance Mains level : GS-II Governance, Social Justice and IR
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Why in News:

  • The Home Ministry has warned of taking penal action against NGOs which change office bearers without taking its approval.

Background: / More in News

  • In a notification, the home ministry said incidents have come to light that some NGOs, having registered under the Foreign Contribution Regulation Act (FCRA), have changed their office bearers without its approval and without updating this data on a real-time  basis through the online application meant for a change of these details.
  • All  NGOs  and  associations  registered  under  the  Foreign  Contribution  Regulation  Act (FCRA), 2010, which makes them eligible to receive foreign funds and donations, have to submit  an  online  application  for  addition,  deletion  and  change  of  details  about  office- bearers and key functionaries within one month.
  • The ministry told the NGOs to submit applications for addition/ deletion/change of details about office bearers/ key functionaries by July 7, failing which penal action will be initiated against them. Since 2014, the central government has started scrutiny of the activities of NGOs  leading  to  the  cancellation  of  their  FCRA  registration,  which  allows  them  to  get foreign funding.
  • There was a total of 23,176 FCRA registered NGOs in 2016-17, which has now come down to around 12,000.

Regulation of NGO under FCRA:

  • The Home Ministry monitors foreign funds donated to NGOs and organisations through the FCRA. The FCRA was brought into force to regulate the flow of foreign funds to voluntary organisations with the objective of preventing any possible diversion of such funds to anti-national activities.
  • However, there are many NGOs which are registered under FEMA and continue to disburse foreign funds to various associations. NGOs under FEMA is regulated by the Finance Ministry, there are many occasions when the Home Ministry failed to monitor the flow of funds effectively.
  • International donors such as the Ford Foundation, the U.K.’s Department for International Development  and  Canada’s  International  Development  Research  Centre  are  registered under FEMA but not the Foreign Contribution Regulation Act (FCRA), 2010.
  • Funds flowing to NGOs can be used for an anti-national activity such as economic security. Hence regulation of NGO receiving fund is necessary.
  • NGO is used by vested interest to halt the developmental project in India as reported by the Intelligence Bureau. This was witnessed in kudankulam protest.
  • Earlier, the Home Ministry wants the Finance Ministry to surrender its to monitor non- governmental organisations (NGOs) under the Foreign Exchange Management Act (FEMA) for effective and better monitoring.
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