Non-Governmental Organisations (NGOs) play a vital role in India’s socio-economic development by delivering services, promoting awareness, and advocating for rights. Over the years, their scope, regulation, and accountability have evolved significantly.

• A non-governmental organisation (NGO) is an organisation that is neither a part of a government nor a conventional for-profit business. Usually set up by ordinary citizens.
• NGO activities include, but are not limited to, environmental, social, advocacy, and human rights work.
• They can work to promote social or political change on a broad scale or very locally. NGOs play a critical role in developing society, improving communities, and promoting citizen participation.

Evolution of NGOs in India & Committee Recommendations

Recommendation of Committees for the Role of NGOs in India

FCRA Amendment Act 2020 and Its Impact on NGOs in India

• Prohibition to accept foreign contributions: Public servants are not permitted to accept foreign contributions.
• Transfer of foreign contribution: It prohibits the transfer of foreign contributions to anyone who is not registered to accept this.
• Aadhaar for registration: All office holders must have an Aadhaar number.
• FCRA account: The foreign contributions must be received only in an account designated by the bank as an FCRA account in branches of the State Bank of India, New Delhi.
• Reduction in use of foreign contributions for administrative purposes: The Act suggests that a maximum of 20% of the total amount of foreign contributions received may be used to cover administrative costs. (FCRA 2010 up to 50%).
• Surrender of certificate: The central government may ask a person to give up their registration certificate.

Key Issues with the FCRA 2020 Faced by NGOs in India

• Financial Inconvenience: Mandatory to open an account at the SBI, New Delhi, is arbitrary and violates the right to equality. It is also inconvenient for NGOS working elsewhere.

• Cripples in NGO Functioning:

• Tight restrictions and the ban on the transfer of funds have rendered NGOs ineffective. As a result, recipients are unable to provide funding for other organizations
• The blanket ban on the transfer of foreign contributions affects the smaller grassroots organisations that may not meet the criteria to get access to grants from foreign countries.
• The 20% administrative expense cap also makes it difficult for NGOs to hire staff and pay for administrative costs.

• Double Standards: On one hand the government invites foreign funds, but when such funds come for educational and charitable purposes, it is prevented.

• Open the doors for Bureaucratic harassment: Introducing dubious amounts of micromanagement can bring official interference and harassment in the sector.

• Tool for Targeting: The legislation may be used to target political opponents and religious minorities.
• Affects Fundamental Rights: The restrictions also have serious consequences on both the rights to free speech and freedom of association under Articles 19(1)(a) and 19(1)(c) of the Constitution. 

Supreme Court’s Observation on FCRA and NGOs in India 

• The SC has upheld the Constitutional validity of the FCRA amendment and provided a stringent regime for effectively regulating the inflow and utilisation of foreign contributions.

Highlights of the Judgement 

• Medicine vs Intoxicant Metaphor: Foreign Contributions serve as medicine so long as it is consumed moderately and discreetly. 

• However, the free and uncontrolled flow of foreign contributions can act as an intoxicant that could impact the sovereignty and integrity of the nation.

• Imposing Political Ideology: The SC underlined that foreign contributions may tend to influence or impose a political ideology.

• Global Precedents: Receiving foreign donations cannot be an absolute or even a vested right.

• There is possibility of the national polity being influenced by foreign contribution is globally recognised.

Interconnected Role of NGOs in India with Citizens and State

Key Roles Played by NGOs in India

• Evaluation and Monitoring - Acting as an independent "auditor" or "watchdog" of corporate and governmental accountability and transparency.
• Service delivery - The operational delivery of vital aid, development projects and social services. 
• For Example – Emergency health services were provided by the Red Cross Society during Russia – Ukraine war.
• Capacity Building – Providing education, training, and information. For example, works of Pratham NGO in the education sector.
• Role in Participative Governance: Many civil society initiatives have contributed to some of the path-breaking laws in the country.
• For instance - Environmental Protection Act-1986, Right to Education Act-2009, FRA-2006 and RTI Act-2005.
• Social awareness: NGOs act as catalysts and create awareness among people who have deep-rooted thoughts about superstition, gender, creed, and religious discrimination.
• For Example: Jan Sahas – focussed on awareness and community empowerment to end manual scavenging
• Bridging The Gap: NGOs endeavour to plug gaps in the government’s programmes and reach out to sections of people often left untouched by state projects. 
• For example, providing aid to migrant workers in the Covid-19 crisis, Reaching out to people for vaccine awareness etc.
• Role of an Enabler: Community-level outfits and self-help groups are critical for bringing any change to the ground. 
• For Example, NGOs and research agencies provide financial aid to grassroots institutions.
• Acting as a Pressure Group: There are political NGOs that mobilise public opinion against the government’s policies and actions and fix accountability on the performance of grassroots government functionaries.

Major Challenges Faced by NGOs in India

• Lack of Performing NGOs: Only about 1.5% of NGOs are thought to work on developing countries. 
• Political Activism:  Many NGOs have actively participated in political campaigns, sometimes acting as proxies for political parties. They also get funds from foreign institutions for the same.
• Obnoxious agenda: Despite claiming to be involved in social empowerment or human rights initiatives, these organizations are allegedly sides for separatist groups 
• Asymmetry of power: Some NGOs have acquired the capacity of multinational companies because of large-scale offshore funding. On the other hand, several NGOs lack even operational funding.
• Siphoning of funds: NGOs are becoming safe havens to channel black money and tax evasion. Such NGOs are causing loss to the exchequer by helping others to evade taxes. 
• Lack of Strategic planning: This makes it difficult for them to carry out their goals and activities successfully. As a result, they are unable to solicit and utilize financial support successfully. 
• Ineffective Governance and Networking: It is all too common for NGOs to lack effective governance. A founder might be overly preoccupied with running the NGO for their own gain. 
• lack of youth volunteerism and social work: Due to less alluring pay scales and career opportunities, even parents discourage their kids from participating in social activities. 
• Localisation in urban areas: Most of the NGOs are Centralised in metropolitan and urban areas.

Key Issues Emanating from NGOs in India

Recommendations to Improve the Working of NGOs in India

• Building Capacity: NGOs can easily train staff members and develop the organizational capabilities needed to handle challenges in the future. 
• Real-time advice from experts: It is extremely valuable to have access to advice and direction whenever needed during a project or to improve NGO operations. 
• Access to qualified experts will boost donor confidence and help the project succeed. 
• Technology and communication: All NGOs should use the Internet, email, a website, and the appropriate social media platforms. 
• Financial complaints: Timely submission of annual income and expense reports will enhance NGOs' perception of the governance of NGOs.
• Democratic leadership: NGOs face many obstacles on their way to success. By rotating leadership among its members, such issues can be successfully overcome. 
• Declaring foreign funding: In the era of Globalisation, keeping track of NGO’s foreign funding will ensure that they operate transparently and deter unlawful conduct.
• Instill the Value of Volunteerism: NSS and NCC should encourage students to get involved in volunteer work from an early age. 
• For young graduates who are interested in volunteering, universities, colleges, and schools must work with NGOs and hold campus interviews. 

 Way Forward

• Reforms in Accreditation: Dynamic and diversified National Accreditation Council consisting of academicians, activists, and retired bureaucrats to be established so that compliance of NGOs could be ensured.
• Better Coordination: There should be better coordination between the Ministries of Home Affairs and Finance in terms of monitoring and regulating illicit and unaccounted funds.
• Regulatory mechanism: Financial activities of NGOs are to be regulated by a Regulatory mechanism to eliminate corrupt practices.
• Participation of Common People: It will democratise the functioning of NGOs and help to improve capability.
• Increased Role in Rural Areas: In India, rural areas are home to 65% of the population. Therefore, NGOs must work in rural areas more extensively for improving their quality of life. 

Conclusion

The work done by NGOs significantly aids in nations building. NGOs have the potential to affect millions more lives through their work because the Corporate Social Responsibility (CSR) Act requires large corporations to spend 2% of their revenue on social issues.