tch Wa

ernance Gov

n nday india t h e su

6 governance watch May-June 2012

May-June 2012 governance watch 7

cover story


ne of the noticeable strengths of India’s democracy are its NonGovernmental Organisations (NGOs), a voluntary action movement which is all encompassing in both quality and quantity. NGOs are firmly embedded in the country’s socio-economic life. They are involved in a variety of activities — from policy analysis to school programmes, from participatory natural resources management to activism, now even to street-level activism. Many NGOs are involved in capacity building and creating mass awareness in a wide range of fields: from children rights, women empowerment, old age, health, nutrition, human rights, environment protection, disability, disarmament issues, tribal protection, education, income generation, rural issues, farmers, Dalit and minority issues, disaster, advocacy, corruption, governance, transparency and integrated development — you name it. The NGO sector is robust in its truest sense. India has more than 43,000 registered NGOs under the Foreign Contribution Regulation Act (FCRA), a number that ranks among the highest in the world. While there have been controversies about just how much regulation the voluntary sector requires and questions have been raised on its sources of funding, it is also commonly acknowledged that the government cannot do every thing: there have to be nongovernment actors who can take development plans down to the masses because the country is so huge and varied that you need outside help. So a sector which has seen untrammeled growth in the last three decades or so, is now suddenly in the eye of the storm after Prime Minister Manmohan Singh

Activists say no to the Kudankulam Nuclear Power Plant and a banner asking people whether they are aware of their human rights (far left)

NGOs iN iNdia are OpeN tO risks Of mONey lauNderiNG aNd terrOr fiNaNciNG — r.k.siNGh, uNiON hOme secretary
accused US-backed NGOs of fueling protests against nuclear reactors in Tamil Nadu’s Kudankulam, leading to an outcry. The question that needs answering is this: is the Indian government tightening its noose around NGOs? According to well placed sources, the government is actively working on a blue print to regulate the NGO sector. It is examining a Planning Commission proposal to bring the voluntary sector under the ambit of the RTI Act. The ostensible aim is to make this vast sector of civil society activists, who receive public funds, more accountable and transparent. The crackdown, it would appear, has begun. The government has issued show cause notices to 21,000 NGOs out of total 43,033 that are registered, which it says are not complying with its new policy and action is being taken for cancellation of their registration certificates after examining their replies. Union home secretary R.K.Singh, explaining the government clampdown in a January 2012 report, has noted that “while it is not proper to make sweeping generalisations, it is necessary to note that the NGO sector in India is vulnerable to the risks of money laundering and terrorist financing’’.

the NGO sectOr iN iNdia is rObust aNd there are mOre thaN 43,000 reGistered bOdies wOrkiNG

Therefore, necessary steps for rigorous enforcement as well as coordination with countries for law enforcement will continue.” The Planning Commission has even suggested the creation of a separate ministry of voluntary affairs and an apex body to bring all NGOs under one umbrella. Says Catherine Bernard, member of the Sisters of the Cross (SCC) Chavanod, France, “I think the government is in a bind and it seems not to trust itself and this reflects in its relation to other institutions, including NGOs. It is certainly not democratic to ‘regulate’ NGO’s in ways we hear it reported in the media and other wise. It is ‘control’ not ‘regulation’. The need today is partnership and dialogue.’’ The move against NGOs is considered surprising, considering the clout of Sonia Gandhi-managed National Advisory Council (NAC) which includes a clutch of some of the most reputed voluntary activists in the country like Aruna Roy, Deep Joshi, Madhav Gadgil and Mirai Chatterjee, coordinator of SEWA, Ahmedabad. Manmohan Singh in an interview to ‘Science’ magazine was quoted as saying that “the Atomic energy programme has got into problems because these NGOs, mostly I think based in the US, don’t appreciate the need for our country to increase energy supply,” referring to the protests against Kudankulam nuclear power station whose launch has been halted by protestors raising safety concerns. Dipayan, a Kolkata-based environmental activist, chooses his words carefully. “I believe, we are still not that empowered to lodge a protest unless supported by any external agency (in this case American NGOs) else locals would have also raised their voices
May-June 2012 governance watch 9

8 governance watch May-June 2012

Photo : Ajit KrishnA

cover story

for debating uranium mining in Porkut area, Nongri in West Khasi Hills or in Yodogawa mines of Jharkhand. To that extent the PM is right, but would he pay equal attention to genuine issues raised by civil societies in the development sector? I think not, because the issues have to suit the political will.’’ According to the government report, NGOs have received more than Rs. one Lakh Crore in the last 20 years as foreign contribution from various countries. Nearly 5o per cent NGOs have not declared the amount which they have received from foreign donors. Only 21,508 associations out of 43,000 odd have submitted their returns while 7,275 have reported ‘nil’ receipt of foreign contribution. The report accepts that the number of NGOs registered under FCRA would be less than 2 per cent of total number of NGOs. While the reality is that India has no centralised database on the number of NGOs and the quantum of finance involved in their operations, unofficial figures indicate that there are over 40 lakh NGOs registered under the Societies Registration Act, Trust Act and other such enactments. To be sure, India has a long distinguished tradition of voluntary action but post 1947, this practice has seen a dip in the form of donations from non-institutional communities due to urban migration and the beginning of state welfare as policy. Before Independence, voluntary organisations imbued with Gandhian philosophy involved themselves in the social welfare sector. Notes a steering committee report of the Planning
10 governance watch May-June 2012

Children with PM Manmohan Singh during the campaign Nine is Mine in Delhi

mObilisiNG resOurces fOr NGOs is NOt aN easy task. they baNk ON iNterNal aNd exterNal sOurces

Commission on the voluntary sector: “It has been shaped by two major influences: one rooted in indigenous traditions and value systems, and the other a product of the interface between the Indian society and the western world. Indian traditions and value-systems are rooted in religion that prescribes a code of ethics for the individual and the principles governing social life.’’ Historically, philanthropy and individual acts of social service have been the main forms of voluntary activity in India. Institutionalised social service activities existed largely within the domain of religious institutions: ashrams and maths among Hindus, Waqfs and Khanqahs among Muslims and Gurudwaras and Deras among Sikhs. Notes the Planning Commission, “The concept of secular voluntary activity accelerated with the advent of western, mainly British, influence in India. The work of Christian missionaries in the field of education and health care, especially in remote tribal areas, stood out as examples of dedicated service to the poor, even though the motivation may have been to win over these people to Christianity. The example of Christian missionary work exerted a great influence on the new English educated elite that emerged in the 18th and 19th centuries. The organised form of charity and service to the poor practiced by the Christian missionaries impressed many who tried to emulate them.”

The activities of the Brahmo Samaj in Bengal, Arya Samaj in north India and the Ramakrishna Mission in different parts of the country are noteworthy. Resource mobilisation for NGOs or in India today is not an easy task. They manage it either from internal sources or external. Earlier funds were mobilised from various non-institutional and institutional sources. Since the late 1960s, foreign funding to NGOs started flowing from international private non-institutions and global private institutions. Funding from the Lions Club, International Red Cross Society and Amnesty International come under this category. Similarly NGOs of industrialised countries such as Oxfam-America, CARE, Action Aid, U.K. became the source of funding. Solidarity groups and international trade unions are another source of global funding from developed nations. Their funding is mainly confined to issues relating to human rights, women and child development and environment. Most of the private institutional funding to NGOs come from the international corporate bodies. Institutional funding also comes to NGOs from bilateral and multilateral donor agencies. Bilateral funding

diGvijay siNGh Named aN eurOpeaN NGO fOr beiNG iN tOuch with iNsurGeNts iN the NOrth east

includes aid from agencies, departments and ministries of countries such as U.S.A., U.K., Japan, Sweden, Denmark, Norway, Canada and Australia. USA is the leading country followed by Germany, Italy, Denmark and the United Kingdom among the bilateral aid donors to India. In addition, there are the multilateral institutional funding agencies who support grassroots activism. However their funding is very limited and is confined largely to the major voluntary organistions in India and they do not fall under the FCRA. Such Multilateral funding agencies include UN agencies like WHO, UNESCO, UNICEF, FAO, UNFPA, UNDP, ILO, UNEP, the World Bank, International Monetary Fund (IMF), Asian Development Bank (ADB), African Development Bank (AfDB), Islamic Development Bank (IDB), the Commonwealth Development Corporation (CDC), the Arab and OPEC multilateral aid agencies. These agencies provide funding under the overall supervision and regulation of the government. There are many governmental and semi or quasi governmental agencies like the National Children’s fund, Central Social Welfare Board, Family Planning Associations of India and CAPART which act as donors. At the local level, funds are provided largely through the district rural development agencies (DRDAs), zilla parishads and panchayati raj institutions etc. Interestingly, state funding of the voluntary sector easily outstrips what they receive from external sources. For example the ministry of social justice and empowerment had supported 2,100 voluntary organisations
May-June 2012 governance watch 11

cover story
The Kudankulam Nuclear Power Plant

in the country and had released Rs 1,800 million during 1999- 2000, as against Rs 1,110 million in 1998-99. At present the total central government funding is estimated to cross Rs 10 billion from Rs. 1,500 million during the Seventh Five Year Plan period. Despite their over-arching presence and solid work on ground, a section of those opposed to NGOs have levelled a variety of charges, which include voluntary groups raising anti-development slogans in the name of environmental or safety hazards like Kudankulam, unfair criticism of security forces on human rights issues, influencing voters and could be some instances, be supporters of radical politics through funding. In 2002, minister of state for external affairs Digvijay Singh named an European NGO for its involvement with underground insurgents in the North East. In his reply, Singh named Netherlands as one of the countries used by radicals to further their anti-India activities, besides Pakistan. According to official records, Netherland-based NGOs NCIV (Netherlands Council on Ingeneous Volk geist) led by Leovander Vlist was said to be instrumental in bringing various North East insurgent groups under one umbrella. In March this year, home minister P Chidam-

baram told the Rajya Sabha that some foreign funds to NGOs were being diverted to terror groups. Writes Rajiv Malhotra in “Breaking India”, a book co-authored by him: “India’s integrity is being undermined by three global networks that have well-established operating bases inside India: (i) Islamic radicalism linked to Pakistan, (ii) Maoists and Marxist radicals supported by China via intermediaries such as Nepal, and (iii) Dravidian and Dalit identity separatism being fostered by the West in the name of human rights.”

top recipient associations (2009-10)
Name of the Association
World Vision of India, Tamil Nadu Rural Development Trust, Andhra Pradesh Shri Sevassubramania Nadar Educational Charitable Trust, Tamil Nadu Believers Church India, Kerala Caruna Bal Vikas, Tamil Nadu Women’s Development Trust, Andhra Pradesh Sri Sri Jagadguru Shankaracharya, Karnataka Action Aid, Karnataka Bal Raksha Bharat, Delhi SOS Children’s Village of India, Delhi Love India Ministries, Kerala Oxfam Trust, Delhi Plan International Inc., Delhi Tibetan Children’s Village, Himachal Pradesh Missionaries of Charity, West Bengal Sri Sathya Sai Central Trust, Andhra Pradesh Population Services International, Delhi Aga Khan Foundation, Delhi Gospel For Asia, Kerala Bochasanwasi Akshar Purushottam Swaminarayan Sanstha, Gujarat Compassion East India., West Bengal Church’s Auxiliary For Social Action., Delhi A.M.G. India International., Andhra Pradesh Pratham Mumbai Education Initiative., Maharashtra Caritas India., Delhi

(Rs. in Crore)
208.94 151.31 94.28 88.45 82.60 80.29 70.67 66.46 66.03 62.21 62.04 58.80 55.36 53.49 53.35 52.68 49.53 49.17 48.91 48.22 48.19 44.44 44.30 44.23 43.58

There are many examples to show how some of these foreignfunded NGOs are harmful for the nation and playing into foreign hands

Arundhati Ghosh

Dr. Catherine Bernard

I think the government is in a bind and it seems not to trust itself and this reflects in its relation to other institutions, including NGOs

Will the PM pay attention to genuine issues raised by civil societies in the development sector? I think not, because the issues have to suit the political will

Dr. Dipayan

All these streams are being intellectually and financially supported by foreign donors with vested interests. Former Indian diplomat Arundhati Ghose agrees. “There are many examples to show how some of these foreign-funded NGOs are harmful for the nation and playing into foreign hands.” Her own nephew and NGO activist Sanjay Ghosh was killed by the ULFA in Assam. She wrote in an article, “There is a veritable industry of human rights organisations. These NGOs are powerful, as they are given almost equal speaking time on any subject on the agenda in the UN bodies. They offer their platforms to wanted terrorists of India. Anoop Chetia of ULFA was given a chance to speak by a UK-based NGO “Liberation”. There appears to be no dearth of funding for these organisations.” There are, of course, some who are seriously concerned with human rights violations – if only by the state – and base their charge on well documented or well researched situations. There are NGOs that are funded, directly or indirectly, by governments to project their own government’s point of view. There are groups who regularly brief their government representatives, before and during meetings and who sometimes act as domestic pressure groups on the government concerned to raise a particular issue about a particular country. The government, keeping in mind the large scale growth of registered NGOs along with quantum leaps in the amount of foreign contribution coupled with a changed internal security scenario and spread of use of communication and information technology, has gone in for changes in FCRA which were enacted in 1976 and was last amended in 1984. Thus the Foreign Contribution (Regulation) Rules, 2011 was made under section 48 of FCRA, 2010. Stringent provisions have been made in the FCRA, 2010, in order to prevent misutilisation of foreign contributions. States the ministry of home affairs, “The focus of the act is to ensure that the foreign contribution and foreign hospitality is not utilised to affect or influence electoral politics, public servants, judges and other people working in important areas of national life like journalists, printers and publishers of newspapers. “The Act also seeks to regulate flow of foreign funds to voluntary organisations with the objective of preventing any possible diversion of such funds towards activities detrimental to national interest and to ensure that in-

dividuals and organisations may function in a manner consistent with the values of the sovereign democratic republic.” In addition, the new law has stipulated a fiveyear validity for all associations registered earlier, doing away with the concept of a permanent’ registration. The act regulates acceptance of foreign hospitality by certain individuals, which includes members of a legislature, office-bearers of a political party, judges, government servants or employees of any corporation, while visiting any country or territory outside India. Such individuals can receive foreign hospitality only with the prior permission of the central government. According to sources in the MHA, the central government has sent letters to state governments to take strict actions against defaulter NGOs. The results have been immediate: there is already a declining trend in foreign funds. While in 2009-10, 21,508 associations had reported receipt of foreign contribution amounting to Rs. 10,337.53 crore, in 2010-11 only 14,779 NGOs reported receipts of Rs 7810.84 crore of foreign funds.

NGOs are pOwerful, aNd GiveN almOst equal speakiNG time ON aNy subject at the uN

All told, the voluntary movement itself has spawned some famous household names: Medha Patkar, Teesta Setalvad, Sunderlal Bahuguna and Arundhati Roy. There are others who opt for a hard life and work relentlessly, completely anonymous. They are the heroes.
May-June 2012 governance watch 13

12 governance watch May-June 2012

cover story
bill is trying to insert a secrecy clause against the spirit of transparency and the peoples right to information enshrined in the RTI Act and the Indian Constitution. A similar clause is being inserted in the bio technology regulatory bill. We would like to clarify, that the Mazdoor Kisan Shakti Sangathan (MKSS) of which I am a member is not an NGO. It is a people’s collective, that operates on indigenous personal contributions and our accounts are transparent and accessible on our website for all to see. We participate in people’s campaigns and movements and see ourselves as part of the non party political process. Therefore, I am not conversant with what the “NGO sector” thinks of the government attitude to them and vice versa. The MKSS firmly believes in democratic procedures and systems, the constitution and the role of parliament in legislating. At the same time, as a people movement, we feel it is important to engage with the State to bring issues to their attention, and do whatever we can to insist on transparency, accountability and delivery of essential goods and services from the government. The only way to combat this alleged misuse of funds is to insist on a regime of transparency across the board, whether it is government spending, or NGO spending, or even corporate investments, which are claimed to be “in national interest”. It is of critical importance that complete transparency be maintained by all the participants in this debate: by the NGO’s, by the Government, by the movement, and most importantly by the nuclear establishment. I do feel that there has been a systematic clamping down of democratic space available for dissent in this country. Everybody must be allowed to place their views and opinions in the public domain, and debate the pros and cons of each issue – whether of nuclear energy or GM crops, instead of subverting these issues by raising red herrings. (Roy is political and social activist who founded and heads the Mazdoor Kisan Shakti Sangathana.) together on developmental projects with resources being contributed by the state and where the two sides came face to face where the state was challenged by the NGOs on the issue of fresh enactment of FCRA in 2007 when the state decided to repeal the 1976 act by a fresh legislation that triggered a debate on whole range of issues, the two sides again taking a nuanced stance. Some of such examples only prove that the relationship between the state and the NGOs has been driven by mutual convenience and co-option. In the process many NGOs blame the state for having failed to have defined the relationship between the two, unlike what the state has done vis-a-vis the corporate sector. Over the years, there have been several attempts made to bring about reconciliation between the state and NGOs, but not successfully so far. One of the best attempts made in this direction has been from the Planning Commission, which on several occasions provided both support and platform to the NGOs to leverage the relationship to further build up its cross sectoral bridges with other ministries and government departments. In March 2000, the Planning Commission was declared as a nodal agency for the interface between state and NGOs. In 2007, it came up with a national policy on voluntary sector, which was essentially written by senior NGO professionals in the country. The commission also started a civil society window to give space to their voices and take their inputs for planning and development of various people-centric schemes. It also provided the NGOs a mechanism to enrol themselves on the website of the Planning Commission to be able to have access various government grants. Efforts were made to involve civil society organisations both in deciding the plan document and also to put them through the finance ministry to enable them to articulate their perspectives on development issues before the budget. (Pandey is executive director, UN Global Compact Network India.)
May-June 2012 governance watch 15


NOw NGOs bear the burNt Of GOvt aGeNcies
To ascribe Indian opinion to a foreign hand is under estimating the intelligence and the participation of Indians in the democratic process. It is unimaginable that the Prime Minister of a big democratic country like India should be worried about a small sum of money going to some NGOs. The net result is that even organisations engaging in just development work are being harassed by government agencies. It is also an indication of the double standards of globalisation. Ironically, on the nuclear issue, the biggest influence of foreign funds and the foreign hand are the pro- nuclear corporations, and the US government which openly lobbied with Indian political parties in favour of the controversial nuclear agreement. Why can’t international experience of the anti- nuclear movement be a legitimate part of the debate? Currently, the nuclear regulatory

c o lu m n a ru n a r oy

column Poor an ch andr a Pandey

he remark by the Prime Minister of India to a magazine blaming foreign NGOs for protests in India against nuclear reactors and GM crops is diversionary and disturbing. You cannot allege that the views and concerns of local residents, are suspect and that Indian citizens are manipulated by foreign funds. The alleged involvement of foreign NGOs/ or foreign funds being used in the Kudankulam protests is a red herring. Nuclear energy is a hotly debated and contentious issue all over the world. Even in countries like Japan, where a significant percentage of the energy comes from nuclear power, local residents have strongly protested and caused a review of what was considered a successful nuclear energy programme. To blame a “foreign hand” for the Kudankulam protests is therefore to deliberately divert the issue. Kudankulam is in fact an example of a non-violent, democratic peoples protest. The movement is demanding a thorough review of the process of sanction and running of nuclear power plants. While there might be some foreign funded NGO’s working on issues of environmental awareness, the participation of people and the extent of the protests demonstrates how rooted and indigenous it is. In fact, following the Prime Ministers statement, there have been unethical and uncalled for harassment of NGOs by the State, who were in no way involved in the protest.
14 governance watch May-June 2012


Get state, GrOups ON ONe platfOrm
ing various activities that range from spreading awareness through advocacy, delivery of essential services to fighting against corruption, inefficiency of the establishment, human rights and whistle blowing against the system. Lately, NGOs nuanced stand against the nuclear power plant in Tamil Nadu seems to have sparked a fresh row on its utility for people of the state dividing the establishment and the NGOs starkly. If one were to follow the contours of the relationship between the establishment and the NGOs over a long period of time, one would notice a trend that is hard to ignore. The trend has been one of cosiness at times and at other times adversarial. There are also instances where the state collaborated with the NGOs and an equal number of instances where the two came face to face with each other. Some examples where the two came to collaborate include working

the Net result is that eveN OrGaNisatiONs that eNGaGe iN pure develOpmeNt wOrk are beiNG harassed by GOverNmeNt aGeNcies

he roots of volunteerism lie in the very ethos of the Indian tradition, culture and understanding. Every religious stream regardless of its antiquity and regional affiliations has embedded within its fabric the elements of tolerance, peace, service and values and these are the values and tenets which are broadly applied by civil society organisations, including the NGOs. The growth, evolution and development over the years of the NGOs has been debated, contested and often appreciated based on their relationship with the establishment. Given the size and role that NGOs play in Indian development, the importance of the sector has only grown due to grassroots intervention and various initiatives to empower citizens. Lately the role of NGOs in streamlining their public awareness campaigns on a range of issues including to sensitise public on fighting corruption, environmental violations by the government and corporate sector and fixing accountability of the government to provide effective delivery mechanisms to serve people better, have been redefining the state and NGO relationship in the recent past. Some events following these do not augur well for democratic traditions and vibrant democracy that India is. India currently is the world’s largest capital, housing nearly million NGOs of all types and kinds dotting every nook and corner in the country and undertak-

Over the years, there have beeN several attempts made tO recONcile the state aNd NGOs, but NO success has beeN achieved sO far

cover story
But this obsession of NGO’s with women and village empowerment has completely eclipsed the burning issue that would require NGO’s attention with the tremendous amount of funds they attract from abroad : afforestation, as there are hardly any forest worth the name left today in India. Take the Himalayas for instance, and a region like the lovely Kumaon hills. Less than 40 years ago, people in Almora, the ancient capital of the Kumaons, still remember the beautiful blue cedars forests. Today, there are no forests left around Almora - they were cut down in the early 1970’s by contractors from the plains with the full knowledge of the government - except commercial pine forests, which impoverish the soil and do not hold it properly. Yet, there is terrible shortage of water in Almora, the climate has warmed-up considerably in the last 20 years and wood is fearfully expensive. There are literally hundreds of NGO’s in the Kumaon hills, who are doing lots of women empowerment, lots of village uplifting, lots of weaving this and weaving that… but absolutely no tree planting. Why? “Because the others do not do it”, is the usual answer, when you ask some of the NGO’s or:“because it is too hard work”. But the beauty of the Kumaon hills around Almora is fast vanishing: more and more hotels are coming up, cutting more trees, like near the Kassar Devi temple, above Almora, where Vivekananda is supposed to have meditated and which has been bought to make into a resort by a non- resident Muslim who is suspected to have links with Ibrahim Dawood. Most of the NGOs are funded by western countries but what is not always known is that they often get the bulk of their budgets from big Christian organisations such as Christian Air or Oxfam. Medha Patkar, for instance, has to her credit the Right Livelihood Award, the Rev. MA Thomas National Human Rights Award and others awards. (Gautier is editor-in-chief of the Paris-based La Revue de l’Inde ( and the author of A New History of India.) of vulnerability to influences and risk dynamics ranging across: a. Lack of or limited access to professional management expertise b. Financial inefficiencies and malpractices c. Vested organised crime and political interests d. Extremism and terrorism NEEd FoR good govERNANCE PRACtiCEs Therefore, the policy makers should give top priority to regulate this NGO sector by introducing a regulatory framework to bring in the transparency and accountability in this voluntary sector. Some of the areas where the government needs to intervene are furnished below: a. Financial prudence b. Internal control mechanisms c. Management efficiencies d. Prone to money laundering transactions e. Internal control checks in the operations of NGOs f. Misuse of the image of NGOs leads to mistrust g. Bridging the gap between the toplevel management and grassroot level volunteers h. Strategic leadership to provide holistic guidance CoNCLusioN Concerns have been raised that trusts do not spend adequate amounts on their core objects. There isn’t enough transparency in the administration of the trusts, resulting in disproportionately high administrative expenses. Unregulated non-profit organsations (NPO) activities in the past have known to be the conduits for money laundering for organised crime. Global pressure is also growing on India to act urgently. The Financial Action Task Force (FATF) has in its report identified fund transfers from foreign NPOs as one of the major sources for terrorist financing in the country on par with counterfeiting of currency, drug trafficking and extortion. (Roa is an expert on NGO law.)
May-June 2012 governance watch 17

c o lu m n F r a n ç o i s G au t i e r

selliNG iNdia’s pOverty tO make bucks
all appearances – arranged marriages, submission to men, preference of male children in some rural areas (but girls are loved in India like nowhere in the world) - it can be safely said that very often, from the poorest to the richest classes, women control – even if behind the scenes – a lot of the family affairs: the education of their children (men in India are often “mama’s boys”), monetary concerns, and husbands often refer to them for important decisions. Countries such as France or the US, who are often preaching India on “women’s rights” have never had a woman as their top leader, whereas India had Indira Gandhi ruling with an iron hand for nearly 20 years and proportionately they have lesser number of MP’s than India, which is considering earmarking 33 per cent of seats in Parliament for women, a revolution in human history!

half Of the 3.2 milliON NGOs active

c o lu m n K P c r ao


ou may think that the most corrupt organisations in India belong to the government? But you may be wrong, because some of the biggest scammers in this country could be the non-governmental organisations, or NGO’s, and it is all done in the name of the poor of India. In the old days, leaders of NGO’s used to work in the field, dressed simply, lived in humble dwellings and had minimal salaries, sufficient for their most essential needs. But today the new breed of NGOs you meet in Delhi or Bombay, is smartly dressed in jeans, he or she usually comes from India’s upper elite class, carry the latest laptop and often travel around in air conditioned cars. These NGO’s spend half of their time abroad, in London, Paris, or New York, doing smart presentations, with mesmerising slides and excel spreadsheets, in front of gullible westerners, always ready to shed a tear for the poor “downtrodden Indians”, so as to convince them to grant more funds. And what is usually all about? Seventy per cent of the time “woman empowerment”, or “uplifting” the villagers. It is nowadays fashionable in India to highlight the downtrodden Indian women and their underprivileged place in Indian society. But no country in the world has granted such an important place to women in its spirituality and social ethos. And even today, behind
16 governance watch May-June 2012


he Indian voluntary sector (or the NGO sector) is emerging to be a credible force in catalysing social and economic growth, particularly for masses at the ‘bottom of the economic pyramid’. The potential for this is apparent from the experience of other developed economies. If India is to achieve, as is predicted, the living standards of the developed world by 2050, then the NGO sector would need to play a critical role and must grow at a pace much higher than that required of the overall Indian economy. Within India there are about 3.2 million registered NGOs, of which an estimated 1.5 million are active. ExistiNg LEgAL FRAmEwoRk The right of all citizens to form associations or unions is guaranteed under Article 19(1) (c) of the Constitution of India. Charitable organisations usually take a legal status in the form of a Trust, Society, or non-profit company (also called not-for-profit organisations or NGOs), and are regulated by a variety of state and central government agencies, laws and authorities. The federal and state laws (Many states also have their own Public Trusts Acts) which are applicable to charitable organisations. Ngo sECtoR - shoRtComiNgs iN thE PREsENt sEt-uP By its nature the voluntary sector has

an extremely philanthropic side to it, thus making it difficult for corporatelike professionalism or profit-driven accountability-standards to take precedence over its core functions. However, like other key sectors of India, the voluntary sector is also faced with imposing evolutionary and ‘market’ challenges. Hence, issues of internal control mechanisms, professionalism, accountability, transparency and financial management must be given impetus. Evidently, there is both a need for a pertinent shift in the manner of how the voluntary sector views governance and regulatory frameworks. Equally important is to create competencies for better risk management through operational means and management procedures for risk monitoring and risk mitigation. In case of the NGOs, more so than for the corporates, the risks often take the shape

it has becOme fashiONable iN iNdia tO hiGhliGht the dOwNtrOddeN wOmeN aNd their uNderprivileGed place iN iNdiaN sOciety whereas this is NOt

the vOluNtary sectOr is alsO faced with impOsiNG evOlutiONary aNd ‘market’ challeNGes heNce, issues Of iNterNal cONtrOl

cover story


aja Daruwala, the executive director of the Commonwealth Human Rights Initiative, an international NGO based in New Delhi, suggests officials not to tar everyone with the same brush. Excerpts: Prime Minister Manmohan Singh had blamed US-based NGOs for engineering protests against nuclear reactors in Koodankulam. How do you see it? When a Prime Minister speaks we have to imagine that what is said is well founded. But the claim is a very specific one that indicates a deliberate move specifically “US based NGOs” and a deliberate plan to “engineer”. This notion having been dropped into the public mind as an accusation of ulterior motivation and manipulation of policy is left dangling without further proof. The subtext is that there is ‘something wrong’ ‘something devious’. But that is hardly the issue. From senior chief executive officers (CEOs) of countries to secretaries of state, all try to influence policy. International solidarity in doing so is not forbidden or considered morally wrong. It is just something that has to be known and has to be legal. If these two elements are there while we may not approve of support from foreigners, one should not ideally let a drop of poisonous innuendo drop into public consciousness and then let it remain there. The thing is to follow through - also openly and without victimisation or targeting because one finds the actions of a or b inconvenient. After all
18 governance watch May-June 2012

defiNitiON Of aNti-NatiONal NGO uNclear
it is the Indian citizenry that is in protest mode not some strangers in the land. What do you think about the Indian government’s policy towards NGOs? In recent times there has indeed been a ‘tightening’ across the board. The new foreign contribution law and the income tax law do disadvantage to the sector. The sector feels it is necessary to regulate just as one would regulate the corporate sector or the inflow of FDIs or even the individual inflow of funds. But there is a subtle difference in regulation and control. I think there is a tendency to the latter. This is based on a subterranean suspicion of the sector as being too vociferous too vocal and proliferating and the tendency of government to hold the cards in its hands and use it when necessary. The sector has been saying in regard to foreign funds that it should be regulated under the FEMA. You bring money in through official means it can be monitored and that is that; good for the goose good for the gander. The government has resolutely refused to do this, citing undesirable activities and groups that do not use the money for the purposes that they should. Amongst a billion people the activities of some will always look undesirable to others. Conversion in one instance; but the issue is not whether

i n t e r v i e w m a ja da ru wa l a

law must be clear with simple prOcesses that everyONe caN cOmply with. law must make it easy fOr citizeNs tO Obey aNd GO fOward
we like it or not. Individuals are free to convert and be converted. The issue: is the activity illegal? If an activity is illegal the group or association whether they are a political party or they are an unregistered association a gang of robbers or a money laundering cartel, it doesn’t matter. Their activities funded or not associated with an NGO name or not are illegal. The problem with the new NGO law is that it is full of wide discretions and vaguely worded definition of “political activities” and cumbersome processes for registration. All this combines to create a sheathed weapon or a Damocles sword hanging over everyone who associates for a cause; any time a government functionary wants to act against someone he can and so it acts ‘in terrorism’. This is bad whether it applies to NGOs or corporates or in-

dividuals. Law must be clear, simple with simple processes that everyone can comply with. Law must make it easy to obey and to tend toward not so difficult that people tend to illegality. When this law combines with the new income tax code which makes it hard for NGOs to sustain themselves through honest activity, it does look as if the government would like to discourage the proliferation of civil society groups. On the other hand we do have a lot of groups and it is necessary to have a system of regulation, but it just has to be honest, fair and equally applicable to all and encouraging of the constitutional right to associate; associate here in the country and across borders in international solidarity of purpose.

The Govt has started taking action against non-reporting NGOs registered under FCRA. Non-reporting is an offence If the government is being even handed, giving time to compound and right the wrongs if there are any, then that is fine. If the government is doing it selectively because something an NGO has done recently is not to their liking, then even though the government has every right to check up on the legality and compliance of regulations by that NGO, it does smack of vindictiveness. Also the degree of consequence matters; if the infraction by the NGO can be sorted out with self correction in a time frame, then let that take place; if it merits a penalty or fine let that take place, but one need not go for the harshest punishment when for all these years nothing has been done by government to assist the NGO to comply. Were notices sent? Were they disobeyed? And so on. One would hope that the same standard of compliance is required of NGOs as of corporates at every level, proprietorial shops and political parties. Even handedness does tend to create a sense amongst all that the law should be obeyed. There are allegations that some NGOs support insurgent groups in the name of human rights. Your comment. Allegations are easy to bandy about and they have the effect that is desired of them. Repeat a lie several times and folks will start believing it. We

have many such allegations that have turned into prejudice; about women, about minorities, about civil liberties groups, I have no idea if insurgent groups or right wing religious groups or political extremists and ideologues in the fringes of political parties use fronts to garner support. If the sector is properly, regularly, transparently, and honestly regulated it would be easy to find out whether actions of receiving support (not only financial) were illegal permissible or not. In the absence of an India wide system that works in standard fashion, we will be ruled by allegation and suspicion and not by law. Do you think some NGOs are misusing foreign funds for their own purposes, which goes against national interest? As stated above I have no idea. This is a diverse country. The RSS wants a Hindu country; the Marxists want another kind of rule; the Constitution allows both points of view to progress through the democratic process. So which one is anti- national? Also what exactly is ‘national interest’? Is a model of development based on big dams more anti-national than one based on small dams? I don’t know and don’t want to comment on this. You have to be very sure that x or y is actually using funds that come for an anti-national purpose through channels and are in fact being used for this. You don’t only have to have foreign funds to use them for ‘antinational purposes’. Suppose there are millions gathered in the name of some individual that is popular with the public at large - what is the difference, even if you don’t like their purpose? Suppose half the money Baba John X gets is from his congregation and the other half is from folks all over the world to promote some outlandish thing like the world is flat and it is a sin to eat wheat flour!
May-June 2012 governance watch 19

cover story
interv iew r a ji v m alhotr a i n t e r v i e w sa n j e e v n ay ya r

sOme GlObal NGOs waNt tO partitiON iNdia

GOvt wakes tO the perils Of fOreiGN mONey


ajiv Malhotra serves on the board of governors of the India Studies Programme at the internationally famed University of Massachusetts and served as chairman for the Asian Studies Education Committee of the state of New Jersey. Besides his work, he has co-authored “Breaking India” an inside account of the role of global NGOs that is a must read for the government officials who have plans to make the whole business of running NGOs more transparent. What is the role of NGOs in nation building in India and worldwide? NGOs play a very important role in building nations and societies. The true spirit of an NGO should be local community organisation for self-help, with links to groups elsewhere only for large projects. But this should not be driven by foreign-based NGOs. India ought to be self sufficient in the NGO sector or else will outsource its sovereignty to others. Does the Indian government have a policy on NGOs? It does not do enough due diligence on direct and indirect foreign funds. It gets involved only after a problems is at hand, like treating a heart patient only after the attack and doing nothing preventive. Prime Minister Manmohan Singh accused US-based NGOs for engineering protests against nuclear reactors in
20 governance watch May-June 2012

Koodankulam. It was good that the government finally woke up. But why only in isolated cases and why only after it has happened? Do you think some NGOs are misusing foreign funds? Yes, my book, “Breaking India” goes into detail. Its not just the money, but the ideological spin, anti-national training camps and building foreign-inspired vote banks in the country’s vulnerable sectors. Some NGOs are diverting money and using it for anti-national purposes in Maoist areas, Jammu and Kashmir other insurgency-prone regions. These reports are true. But the problem is far worse and no longer isolated to a few places. You find this in the rich farmlands of Punjab as well. What about the new law? Its a reporting requirement. Reports

of activities get slanted to make them look benign. If the report says `education’ or `youth empowerment training”, how does it indicate whether the education is one filled with hatred towards fellow Indians? How does it indicate that youth training is aimed at promoting separatist identities? These reporting requirements are easily fooled. Any suggestions? They should read my book and appoint a commission to start investigations. But that will be tough because there are many spoiled brats. The Indian government should put on the table all diplomatic dealings with western nations connected to NGOs and set up its equivalent of the Ford Foundation. Get these neo-rich billionaires to start funding along the lines of what the big Americans did for their country. All foreign supported NGOs (including churches and madrassas) should be delisted as minorities because they should be classified as branch offices of foreign MNCs. That is the way ahead.

anjeev Nayyar, management consultant, talks on the role of NGOs. He says NGOs could stimulate thought by undertaking original, innovative research and follow up action in a socio-culturalenvironmental-education context. Pratham is a very successful NGO in the education space. They can become a useful vehicle for well off citizens to share their wealth, those who are looking for a private not government-sponsored effort. Or the Friends of Tribal which runs a teacher school in tribal areas. The problem arises when NGOs become branches of the global network. It is natural then that their mission and thought would be in line with that of the parent. Does India have a policy on NGOs? The central government has no policy towards NGOs. As long as NGOs are sympathetic to and work in tandem with the party in power, it is fine. The minute they cross the Laxman Rekha, the government comes down heavily, for eg Koodankulam. I call it a Laissez faire policy. Prime Minister Manmohan Singh blamed USbased NGOs for engineering protests against nuclear reactors in Koodankulam. Tamil Nadu and Chennai district have been amongst the largest recipients of foreign money for many years now. This was known to the government all along. So why has the PMO woken up to the perils of foreign mon-

ey now? Because foreign money has been used to delay commissioning the Koodankulam nuclear power plant? As we have seen in the past, any policy matter that has the words ‘nuclear’, such as the IndoUS Nuclear deal, makes the Prime Minister unnaturally assertive and stubborn, notwithstanding threats from UPA allies. Do you think some NGOs are misusing foreign funds in India for their own purposes? The top three donor countries for many years have been USA, Germany, and UK. Remittances from the U.S. Between 2002-03 and 2009-10 have nearly doubled (Rs 1,680 to Rs 3,106 crs). Spain and Italy are in dire economic straits, Britain had a fiscal deficit of 11 per cent of GDP in 2009-10 yet they remitted over Rs 1,000 crores to

the GOverNmeNt has NOt dONe eNOuGh due diliGeNce ON direct aNd iNdirect fOreiGN fuNdiNG aNd it is daNGerOus

as lONG as NGOs wOrk iN taNdem with the party iN pOwer, it is fiNe. the miNute they crOss the laxmaN rekha, there is trOuble ahead fOr them

Indian NGOs per annum. Despite the economic downturn, the west has continued contributions to Indian NGOs? A reading of the top 15 donors and recipients might provide some answers! There are reports that NGOs are diverting money and using it for anti-national purposes in Maoist-hit areas, Jammu and Kashmir, North East and other insurgency-prone regions. The Ministry of Home Affairs (MHA) grants approval to an NGO for receipt of funds from abroad and then annually collates audited receipts and payments accounts, balance sheet etc. The MHA scrutinises returns to ensure that contributions have been well used. During 2009-10, only 46 per cent of foreign contribution recipients filed their annual returns with MHA. Therefore, the government does not even report the actual amount of contributions received by NGOs. There are 38,000 odd registered associations with MHA. Is it possible for the Govt to monitor utilisation of funds and activities?
May-June 2012 governance watch 21