According to World Bank, NGOs are the private organisation that pursue activities to relief suffering, promote interest of the poor, protect the environment and provide basic social services or undertake community development.
NGOs are non-governmental bodies which work in the interest of people while remaining outside the framework of government. They are non-state actors.

Why NGOs are needed?

  • They enhance the govt. accountability by providing checks and balances.
  • They are the service provider to citizens in the fields like health care, education etc. for eg. SAVE LIFE FOUNDATION.
  • Many of them work for ensuring basic dignity by acting as watchdogs of Human Rights for example AMNESTY INTERNATIONAL.
  • They make our democracy more real and vibrant through discussions, debates and opinion building.
  • They help in channelizing international AID which can be used for various developmental activities.
  • NGOs fight for environmental rights which are often neglected and ensure environmental/climate justice for example WETLAND INTERNATIONAL, GREEN PEACE.
  • Several NGOs are instrument in providing relief assistance during disaster and thus minimizing the impact


FCRA ACT of 1976( Foreign Contribution and Regulation Act) and FEMA ACT of 1999( Foreign Exchange Management Act)


  • According to FCRA any NGO that accepts foreign contribution has to register with MHA and such contribution can only be accepted through designated back.
  • The NGO has to report to the central govt. any foreign contribution with in 30 days of receipt.
  • They need to file annual report with the MHA it must also report the amount of foreign contribution and its source, how it was received, the purpose for which it was intended, and the manner it was utilized.
  • In case of non-complete compliance with provision of FCRA the govt. can penalize the NGO for example If these NGO’s don’t fill annual return the govt. can issue show cause notice and subsequently suspend or cancel their licenses.
  • In the last two years licences of around 1700 NGOs have been cancelled by the central govt. after they were found violating various provisions of FCRA.
  • FCRA Amendment Act of 2010:-
  • Registration is mandatory and after 5 years renewable is done else the licence is expire.
  • Only 50% of foreign funds can be used for administrative expensive, therefore allowing the government to control how a civil society spend its money.
  • It changes the term political parties to “organisation with political natures” to Include NGOs, student organisation, trade union etc

Issues with FCRA Act:-

  • Arbitrary use:- Unnecessary harassment is faced by NGOs due to arbitrary use of this Act. Licenses are not renewed many cases citing vague reasons NGOs like FOLD FOUNDATION, GREEN PEACE also have been harassed in past.
  • FCRA is often used to curb political dissent.
  • Renewals since renewal is required in every 5 years it leads to corruption and redtapism.
  • Control on funding: The 50% funding clause curb the administrative freedom of the NGOs.
  • Nor conformity with international regulation:- India is signatory to International Covenant on civil and political right which mandates us to provide freedom of association.
  • In 2015 UN Special Rapporteur on Rights to freedom of peaceful assembly and association submitted its report on the working FCRA Act 2010. It criticise the act and held that the provision are not in conformity with international convention and arbitrary in nature.

FEMA ACT (1999) (Reg. under finance Ministry) (Int. NGO register under it)

  • There are certain NGOs which are register under FEMA and they dispersed foreign funds to various association with in the country. Nearly 100 International NGOs and association receive finds through their Liaison officers gave them to NGOs are across India.
  • According to FEMA Act these NGOs are regulated by Min of Finance for example international donors such as fold foundation, UK department of International development are registered under FEMA and not FCRA.


  • Misappropriation of funds: Money is not used for the intended purpose but for other illegal activities like terror financing, and other band activities.
  • Hampers development: A lot of NGOs are funded externally to stop/ impede developmental works. As per study 2% of GDP is lost every year due to such activities, for example KudanKulam project was targeted by a group of such organisation.
  • Non-transparent in functioning: As per CBI, out of 30 lakh NGOs less than 3 lakh NGOs (which is less than 10%) is file their annual financial Statement, therefore are lot of them bogus and are only on paper. (Shell NGOs).
  • Money laundering: A lot of NGOs don’t have a significant activities and such NGOs are often used for money laundering.
  • Geopolitical aims: Several developed countries use NGOs and other trans- national actors to fulfill their Geo political aims (operating in multi country like Corporate NGOs). For example West Asian Countries are often seeing funding pro- Islamic organisation (hidden agenda).
  • Civil-society activism: Unnecessary activism undermines the democratic institutions and the very essence democracy for fulfilling the vested interest of certain organisation.
  • Accountability: NGOs and CSOs enjoyed the lot of influence and power in modern times, but their accountability is a big question. The question is, are they accountable it’s donor on to stakeholder who fund this organisation or to the people or citizen it is serving?

Way forward: National Accreditation council, It was purposed an autonomous and statutory Body But would not come into effect. It is high time that it should be brought in to regulate NGOs and CSOs in bipartisan way.
There is also need of single regulating body to avoid confusion between MHA and MoF.
There should be legitimate restriction, not arbitrary restriction on the functioning of NGOs. Judiciary can also play an important role in this regard. Further you should refer to the recommendations of Nayak committee.

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