SC seeks law to regulate NGO funds

The Centre has submitted new guidelines for accreditation of nearly 30 lakh NGOs and voluntary organisation in the country.

April 26, 2017 09:57 pm | Updated 09:58 pm IST - New Delhi

A view of the Supreme Court of India in New Delhi.

A view of the Supreme Court of India in New Delhi.

The Supreme Court on Wednesday suggested that the government ought to frame a statutory law to regulate the flow of public money to the NGOs even as Council for Advancement of People’s Action and Rural Technology (CAPART) recommended the registration of 159 FIRs against various NGOs for swindling government funds.

A three-judge Bench led by Chief Justice of India J.S. Khehar suggested introducing a law after perusing guidelines handed over by the government to the court, appointing NITI Aayog as the nodal agency for NGO registration.

But the court said the guidelines might not prove sufficient for “systematising the entire process of accreditation, fund utilisation and audit of NGOs”.

The Centre on April 4 handed over to the Supreme Court the new guidelines framed for accreditation of nearly 30 lakh NGOs and voluntary organisation in the country.

The Union Rural Development Ministry had framed the accreditation guidelines to regulate the “manner in which the VOs/NGOs, which are recipient of grants, would maintain their account, the procedure for audit of the account, including procedure to initiate action for recovering of the grants in case of misappropriation and criminal action”.

Black list

The court, however, gave the government the liberty to start civil and criminal proceedings against 703 NGOs, which according to CAPART, have defaulted. The agency, which works under the Rural Development Ministry, said 718 NGOs had been initially blacklisted, but 15 had responded satisfactorily to notices issued on them.

CBI records filed in 2016 in the Supreme Court had shown show that only 2,90,787 NGOs file annual financial statements of a total of 29,99,623 registered ones under the Societies Registration Act.

In some States, the CBI said the laws do not even provide for the NGOs to be transparent about their financial dealings. In the Union Territories, of a total of 82,250 NGOs registered and functioning, only 50 file their returns.

New Delhi has the highest number of registered NGOs among the Union Territories at 76,566. But none of these organisations submit returns, the CBI chart showed. In Kerala, which has 3,69,137 NGOs, there is no legal provision to submit returns. The same is the case for Punjab with 84,752 and Rajasthan with 1.3 lakh NGOs.

Uttar Pradesh, which has the highest number of NGOs at 5.48 lakh among 26 States, has only about 1.19 lakh filing returns. Tamil Nadu has about 1.55 lakh NGOs registered, however, only 20,277 file returns. Andhra Pradesh has 2.92 lakh NGOs, but only 186 file financial statements annually. West Bengal has 2.34 lakh registered NGOs, of which only 17,089 active NGOs file annual returns.

The Supreme Court had expanded the scope of Mr. Sharma’s PIL petition alleging misuse of funds by Anna Hazare’s NGO Hind Swaraj Trust to include the status of all NGOs.

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