Is there any regulatory mechanism in India to make NGOs answerable on utilizing public money? Discuss while keeping in focus January, 2017 Supreme Court directives to central government.

Published: September 21, 2017

NGOs in India are mainly registered as Societies, Trusts and Charitable Companies and are regulated  under following rules:

  • Article 19(1)(C) of the Indian Constitution.
  • Societies: Societies have to register under The societies Registration Act,1860.
  • Trusts: Private trusts are registered under the central government’s Indian Trusts Act, 1882, and public ones are registered under the state legislation concerned.
  • Charitable companies: They are set up according to section 8 of the Companies Act, 2013. For charitable companies, the compliance requirements are high, as loans and advances are easily.
  • Income Tax Act 1961
  • Those receiving foreign funds are required to obtain license Foreign Contribution and Regulation Act.
  • The Council for Advancement of People’s Action and Rural Technology (CAPART), which works under the Ministry of Rural Development and disburses funds to voluntary organisations working in rural areas also has power to blacklist NGOs

Thus there is no single law which regulates the non-voluntary organizations as a whole. There exists no single database of NGOs operating in India. NGOs receiving fund are under the database of that ministry. Supreme court has asked Central government to make law to regulate NGOs, disbursal of fund and consequential action on account of default.
Current practice of blacklisting is not sufficient and criminal and civil proceedings need to be undertaken by CAPART/ministry.
Now all the NGOs would have to register at NGO Darpan portal of NITI aayog. This is the first step in the direction of regulating NGOs, more stringent steps need to be taken to make participation of NGOs in governance and development more accountable and transparent.

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