Tough norms for NGOs seeking government funds

The Times of India published an article titled, “Tough norms for NGOs seeking government funds.” The article reads as follows;

“Draft guidelines outlining stringent regulations intended to enhance accountability of lakhs of NGOs and voluntary organisations receiving nearly Rs 1,000 crore of government grants every year were submitted by the Centre to the Supreme Courton Wednesday .

The guidelines may seem exhaustive for most NGOs and VOs as they said organisations wanting to get government funds must register afresh online with Niti Aayog‘s `NGO-Darpan’ portal giving details of past work, fund utilisation, yearly audit reports and key persons managing the NGO or VO.

It said the government would have the right to initiate criminal prosecution and blacklist an NGO for not meeting the deadline for completing a project for which grant was given or if money was misused.

‘The registration system should facilitate seamless operation of applicable provisions of the Income Tax Act and Foreign Contribution Regulation Act (FCRA) with respect to NGOs without the need for cumbersome… processes, which create mutual distrust and scope for misuse’, the draft guidelines said.

Another provision mandates NGOs and their office-bearers to execute a bond, equivalent to the money received, promising to refund the amount with 10% interest if funds are misused or not used for the sanctioned purpose. The members of the executive committee of the organisation shall execute a bond in favour of the President of India, for the sanctioned amount in the prescribed format, binding themselves jointly and severally to the terms & conditions’, it said.

‘In the event of the grantee (NGOVO) failing to comply with the conditions or committing breach of the conditions of the bond, the signatories to the bond shall be jointly and severally liable to refund to the President of India, the whole or part amount of the grant with interest at the rate of 10% per annum thereon or the sum specified in the bond’, the guidelines proposed.

The guidelines were placed by additional solicitor general Tushar Mehta before a bench of Chief Justice J S Khehar and Justice D Y Chandrachud, which on January 11 had asked the Centre to frame regulatory guidelines after being informed by CBI that more than 33 lakh NGOs and VOs operated in India but less than 10% (3.07 lakh) filed audited accounts before the competent authority.

Taking umbrage at years of inaction on the part of governments in fastening accountability on NGOs on fund utilisation, the SC had said: ‘The governments are not aware of their responsibility to audit the NGOs as provided under the General Finance Rules, 2005’.”

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