Non-Governmental Organisations (NGOs)

Are They Being Strangulated?


The recent amendments to the FCRA act have once again raked up the issue of strangulation of NGOs through regulatory overkill. NGOs have been operating in India even since before the independence. Their services have been intertwined with India’s welfare and growth trajectory. But, time and again, NGOs have been complaining of being stifled by the governments. In the past two months alone, another batch of high-profile (NGOs) has been stripped of their FCRA licenses by the government. Before dwelling on the reasons behind this, let us first have a fair understanding of NGOs and their contributions to India.

What are NGOs?

Non-governmental organisations (NGOs) or Non- Profit organisation (NPO) is a group, an organisation, non-profit establishments or non-profit entrepreneurship of individuals, activists, volunteers, and social persons. NGO is an organisation that is registered under the sanction of the government and works for the upliftment of society. Every NGO has a social cause and works towards it. The cause could be either social, cultural, religious, political, environmental, educational, etc.

Salient features of NGOs working in India

  • Every NGO has a particular cause and all their activities are directed towards achieving it.
  • These organisations are voluntary groups formed by the like-minded people who have come together to strive for societal cause.
  • They function as autonomous bodies, independent of government’s interferences.
  • They are governed by their own set of rules and regulations.
  • They are not for profit motto. Their motto is to serve the society and not for commercial benefits.
  • They seek donations from the public, private funders, philanthropists and the governments.

They can either be registered or unregistered. Unregistered NGOs are not registered by the government, but carry out their activities independently of the government. Registered ones are registered by the government under various statutes. India, as per CSO, has around 3.2 million registered non-government organisations out of which an estimated 1.5 million are operating as of today.

NGO Registration in India

Basically, NGOs are registered under any of the following categories;

  • Societies: They have to registered under the Societies Registration act 1860
  • Trusts: Private trusts are registered under the central government’s Indian Trusts Act, 1882, and the public ones are registered under the concerned state legislation
  • Charitable companies: They are registered under the section 8 of the Companies Act, 2013. For charitable companies, the compliance requirements are usually high, as loans are easily availed to them compared to a trust or a society.

How are they regulated?

Statutes and provisions that regulate the working of NGOs in India are;

Accreditation: NITI Aayog has been appointed as the nodal agency for the purpose of registration and accreditation of NGOs that seek government funds. NITI Aayog maintains the database of all the accredited NGOs in India and monitors them.

Foreign Contribution Regulation Act (FCRA): Legislated in 1976 by the Indira Gandhi regime during the emergency era. It regulates all grants, non-Indian gifts, and donations to the Indian residents.

  • It aims to regulate the flow of foreign funds to Indian voluntary organisations and others to prevent foreign players from carrying out anti-national activities in India
  • An FCRA registration is mandatory for NGOs receiving foreign funding.
  • As of 2020, there are 22,591 NGOs registered under FCRA in India.
  • It comes under the aegis of Home Ministry.
  • Home Ministry reserves the right to cancel the registration of any NGOs if it is found to be flouting the rules or indulging in illegal and anti-national activities.

Foreign Exchange Management Act (FEMA):

  • This act was enacted in the year 1999 post the LPG reforms to keep a tab on the growing inflow of foreign exchange into the country.
  • It comes under the aegis of Finance ministry
  • Some of the NGOs are registered under the FEMA instead of FCRA.
  • They are usually umbrella organisations and disburse the foreign funds to several NGOs in India. e.g: Ford Foundation.

NGOs under the RTI act: As per the recent Supreme court’s judgment, NGOs that are substantially funded by the government would fall under the ambit of the RTI act and have to abide by its disclosure norms.

What sets them apart?

NGOs have historically been of great help to the administrative apparatus and the downtrodden public. Governments have been seeking active help from NGOs since the independence. They are an indispensable part of India’s welfare story. But what makes them so special? What is it that they have that the government lacks?

  • Non-profit motto: This has been the driving force of the NGOs. They do not work for commercial rewards and are rather driven by the spirit of social service to the fellow beings. Humanitarianism is their motto and service is their means.
  • Domain expertise: public officials usually are bereft of domain expertise. They are generalists and lack the know-how of the task being assigned to them. But NGOs employ the subject experts who are cut out for the particular task. They even bring the international experts to the work.
  • Free from Red-Tapism: They are private organisations bereft of hierarchy. They do not need approvals from various levels to initiate their work.
  • Agility: They often undertake welfare activities even in the remotest corners of the country which are usually neglected by the government officials due to the want of proper transportation system.
  • Public rapport: Unlike public officials, who are usually looked down upon by the general public, NGOs’ personnel enjoy a great amount of public trust and camaraderie. As a result, their work gets easier with a higher amount of public approval. NGOs, driven by the service motto, do not look down up on the public they are set out to serve, rather emphasise treating them with dignity and considering them as agents of change.

Range of their services

The services rendered by the NGOs cover a wide range of domains, which can broadly be classified into four categories.

Complementing governments efforts

NGOs help governments, or governments seek active help of NGOs to help them in governance. Few of such activities are;

  • Enrolling children in schools: Many state governments seek active help of NGOs for achieving universal enrolment. Since, NGOs enjoy greater trust among natives, public are likely to yield to the counselling of the NGOs. Andhra Pradesh government has been successfully making use of NGOs in achieving Universal enrolment.
  • Medical aid: Red Cross Society, Nice Foundation, LVPEI, and DFID have collaborated with Andhra Pradesh government to provide medical aids for the ophthalmology related issues to the Chenchus community.
  • Social Audits: Governments take help of NGOs in evaluation of their governance through involving them in conducting social audits.
  • Policy making: NGOs help policy makers during consultation and deliberation process. NGOs feed the policy makers with domain expertise and knowledge. NGOs have been instrumental in legislation of many statutes like RTI act, RTE act, NFSA act, Child labour act, etc.
  • Cooperative societies: NGOs deserve a great amount of credit for the success of cooperative movement in India. Government has engaged with NGOs to help the locals form cooperatives societies and generate economic activities.

Independent of government:

  • Education: Education is one of the most invaluable services that are rendered by NGOs. They organise classes for the most marginalised communities like the tribals, BPL families, hill-dwelling populace, etc. They also liberate many children from the clutches of child labour and bring them back to school. Most importantly, they conduct classes within the vicinities of their dwellings and provide learner friendly environment.
  • Health: countless NGOs have been conducting medical camps to the poorest strata free of cost. They even reach the hostile hill areas to deliver medical aid and supplies to the tribals. Araku valley in Andhra Pradesh achieved zero maternal mortality rate, thanks to the services of NGO “Asara” which has provided institutional deliveries to the tribals in the region. NGOs have been instrumental in delivering the covid vaccines to remote locations. e.g: ‘Doctors for you’ foundation, Smile campaign, Asara, etc.
  • Economy: They help locals to prosper economically by engaging in a range of services like skilling the women in tailoring and cottage industry skills, skilling men with digital literacy, providing micro finances, helping them access institutional credits, helping them set up cottage industries, etc. E.g., an NGO called ‘Rural development trust’ has helped Chenchu tribes of Andhra Pradesh to manufacture 10 lakh masks during the pandemic and helped them to commodify them.
  • Women empowerment: They help women gain education, literacy, skills, legal awareness, etc to make them less dependent on their male counterparts. They also provide rehabilitation to the women who are victims of domestic violence. They run micro industries to employ the rescued women in income-generating activities. They also provide free legal aid to such women.
  • Working for marginalised sections: The poor, widows, destitute, orphans, manual scavengers, handicapped, children, mentally retarded, etc communities have been greatly benefitted by the helping hands lent by the NGOs.

Protecting the rights of people

A lot of goodwill that NGOs bagged can be attributed to this particular category of services rendered by NGOs. As we all know that fundamental rights are still a luxury in India and safeguarding them is a tedious process in India as judicial remedies are expensive and complex. NGOs help them to fight legal battles when their rights are being trampled upon by the authorities. They have unearthed many incidents of police atrocities, the illegal raging of the houses, authorities acting against the court judgments, etc. The Samatha judgment was the result of NGOs’ active fight against the encroachment of dwelling lands of the tribals. It’s the work of NGOs that has helped Baigas of Madhya Pradesh to avail their statutory rights under the Forest Rights Act 2006.

Saviours of environment

In developing countries, especially India, the environment has historically been paid only scant regard by the authorities. As a reason many trees have been felled down, ponds have been filled up, dams have been built, forest areas have encroached, etc. NGOs have been fighting against such irreparable damage to the environment caused by the administration’s disregard for the environment. Save silent valley movement, Narmada Bachao Andolan, etc, have been the result of NGOs being determined to fight the degradation of environment.


  • Kailash Satyarthi foundation: The Kailash Satyarthi Children’s Foundation (KSCF) was established in 2004, by the Nobel Peace Laureate, Kailash Satyarthi to champion the cause of child care. Its main motto is to end violence against and exploitation of children in India. It has fought against child labour, sexual abuse of children, exploitation of children, etc, and has so far rescued and rehabilitated around 90,000 children in India. It also works closely with the government to rescue children and in bringing them to schools.
  • Nilgiris Wynaad Tribal Welfare Society: It has been working for the upliftment of tribals of the Nilgiris region of Tamil Nadu since 1978. Originally it was established to help the tribals with medical aid but later expanded to many activities like education, empowerment, legal aid, etc. It has been helping the tribals to commodify their produce and earn a livelihood.


  1. Foreign funding: Many of the NGOs which receive foreign funding are opaque to the government’s scrutiny as they do not divulge their source of funding. Asper CBI’s report to the Supreme court, only 10% of the total NGOs file annual financial reports. As a result, some foreign agencies with vested interests are found to have been involved in funding anti-national agitations in India. For example, the kundankulam agitation. As per the report of the Intelligence bureau, agitations by the NGOs cost India 2-3% of its GDP.
  2. Over dependence on govt funds: NGOs’ over-dependence on government for the funding basically dilutes their credential. It doesn’t allow them to work independently. There is a chance of politics creeping into the agenda of such NGOs who may have to yield to the pressures of ruling party.
  3. Encroachment on traditions: under the garb of activism, many NGOs, especially those funded by foreign agencies have been found to be interfering in our cultural practices. E.g.; PETA’s agitation against Jallikattu practice of Tamil Nadu
  4. Duplication of works: due to the presence of multiple number of NGOs working in the same area, often times their works result in duplication and thus leading to wastage of resources.
  5. Misappropriation of funds: many times, the stated purpose and the actual expenditure doesn’t match. Funds received for one purpose are diverted to further the personal agendas of the NGOs.
  6. Corporatized entities: Many of the staff in NGOs are getting lured by the above-the-market salaries being offered by the big NGOs. As a result, not all the NGOs are working with the humanitarian zeal.
  7. Denting India’s reputation: The agitation of the NGOs some times gain international media’s attention and undermine India’s soft power credentials. The IB report mentions names of few such NGOs; Amnesty International, Action Aid and Greenpeace to name a few.
  8. Money laundering: Many NGOs are reported to have been abused as the conduit for round tripping the illegally sourced money.

Issues faced by NGOs

Regulatory strangulation

Historically, Indian governments have looked at NGOs with suspicion. And the trend has only exacerbated in recent years. In 2019, in a written reply in the Rajya Sabha, the government admits to having banned about 14,500 NGOs over the past five years, and FCRA licenses of 1,808 of these had been cancelled. The recent amendments to the FCRA served as a body blow to the NGOs sector in India.

Amendments to the FCRA 2020:

  • Foreign contribution shall be received only through banking channels and has to be accounted in the manner prescribed.
  • All the foreign fund receiving NGOs shall receive funds only into the designated SBI, Delhi branch.
  • Only a maximum of 20% of the total foreign funds received can be used for administrative purposes. Earlier the cap is 50%.
  • The amendment prohibits retransferring of foreign funds to the other agencies not registered for receiving foreign funds.
  • Aadhar was made compulsory for all the office bearers of NGOs receiving foreign funding.

Criticism against the amendment:

  • Restricting the choice of bank account to Delhi’s SBI would increase the logistical issues.
  • Stifles the freedom of NGOs as they couldn’t retransfer the funds to local agencies any more.
  • Capping the administrative expenses to 20% would cripple many agencies who operate large networks.
  • Opens the doors for bureaucratic harassment.
  • With sub-granting being banned, many smaller NGOs may feel suffocated

Lack of adequate funding

India NGOs are often choked of sufficient funds, considering the fact that most of the NGOs are dependent on government’s funding. Also, with the new FCRA rules, NGOs are further choked of the resources. This may blow serious impediment to their social work and aspirations.

Lack of human resource

They face a severe crunch of qualified staff and personnel with adequate expertise in the vastly multiplying spheres of operations

Cultural barrages

NGO are often looked down upon trampling on cultural practises of the people under the veil of social activism. Even the activism directed at progressive causes like abolition of child marriages, are often met with public dissent. It is difficult to achieve social change without public’s trust.

Course correction

  • Attitudinal change: Government should stop looking down on every NGO with suspicion. Government should organise wide range of consultations with the civil society and should provide adequate breathing space for the NGOs to work with autonomy through bringing in amendments to the recently amended FCRA.
  • Rating system: NITI Aayog should start rating every NGO basing up on their work and their impact and should incentivise the best performers. This would bring healthy competition among the NGOs.
  • Incentivisation: Government should provide special incentives for NGOs working in the remote and peripheral areas. Otherwise, the NGOs would find little motivation to work in peripherals.
  • International collaboration: Government should help NGOs find international partners and thereby increase their foot prints.
  • Consolidation of efforts: it would be difficult up on the part of thousands of NGOs to come together and consolidate their efforts. Rather, government, being the central agency that regulates all the NGOs, should take up this job of consolidating the efforts of all the NGOs to prevent the duplication of work and wastage of resources.
  • Tolerance of constructive criticism: Democratic regimes should provide some room for the healthy criticism. Government should restrain from choking the dissenting voices of the NGOs.
  • Implement the recommendation of Vijay Kumar committee:
    • Ease down the regulation norms
    • Modernize and simplify the registration and compliance procedures
    • Obviate the need for the physical interface between government officials and NGOs.
    • Maintain a database of all the NGOs and their activities so that public can access it.

The mammoth contributions of NGOs were once again on display during the pandemic. During the first wave, when millions of migrant labourers were stranded on Highways, it was NGOs who rose up to the occasion and provided them with essentials like transportation, medical aid, etc. During the second wave, when people were running from pillar to post to avail of oxygen supplies and India’s health care infra came to a grinding halt, again it was NGOs that lent a helping hand in the form of providing essential supplies. The pandemic was merely a reminder of the vitality of the NGOs’ existence. They have been serving India in countless ways, particularly since the independence. One can find the signatures of India’s civil society in every wake of the Indian growth trajectory. It is equally true that they aren’t totally devoid of any guilt. But the need of the hour is to separate the chaff from the grain. Government cannot treat the entire Civil society with suspicion. The state should evolve enough mechanisms to weed out the miscreants and at the same time facilitate a conducive environment for the benign ones to carry on with their activities with freedom. One should keep in mind that a country with billion plus population cannot be set on a growth trajectory without leveraging the services of civil society.



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