CGP 2020

Governance

ROLE OF NGOS

CONTENT: SYLLABUS:
1. Introduction
2. NGOs - What are they? GS II: Role of NGOs
3. Evolution of NGOs in India
4. Types of NGOs
5. Regulatory Framework
6. National Policy on the Voluntary Sector
7. Role played by NGOs in India
8. Challenges related to NGOs in India
9. Suggestions to improve the working of NGOs
10. Way Forward
11. Previous Year Mains Question

INTRODUCTION
● Non-Governmental Organizations (NGOs) or Private Voluntary Organizations (PVOs) have emerged
as a new actor on the international stage and are making their presence increasingly felt.
● A decade ago, NGOs played a fairly peripheral role. Today, however, NGOs participate actively in
various political, economic and social matters.

NGOs - WHAT ARE THEY?

● The World Bank defines NGOs as private organizations that pursue activities to relieve suffering,
promote the interests of the poor, protect the environment, provide basic social services, or undertake
community development.
● NGOs are that part of the civil society which is organized and specialized in its functions. They believe
in certain basic social principles and their activities are typically directed towards empowerment of
socially or economically marginalized groups. For instance, an NGO such as SEWA which works
towards empowerment of low- income earning self-employed women.
● They are legally constituted organizations which operate independently from Government and are
generally considered to be nonstate, nonprofit oriented groups who pursue purposes of public interest.
● They come in all sizes, shapes, ideologies, nationalities, organizing structures and styles. Some focus on
nothing but local issues. Others, address issues that span whole continents, and some like Amnesty
International span the entire globe.
● They encompass everything from charities and relief agencies to political parties; think tanks and
academic centers to community organizations; cultural associations to continent wide farmers'
networks; women's groups to environmental federations; social movements to human rights and
religious groups.
● NGOs work on their own, in conjunction with individual governments or with international
organizations.

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EVOLUTION OF NGOs IN INDIA
Pre Independence -
● India has a long history of civil society based on the concepts of daana (giving) and seva (service).
voluntary organizations — organizations that are voluntary in spirit and without profit-making
objectives—were active in cultural promotion, education, health, and natural disaster relief as early as
the medieval era.
● They proliferated during British rule, working to improve social welfare and literacy and pursuing
relief projects. During the second half of the 19th century, nationalist consciousness spread across India
and self-help emerged as the primary focus of socio-political movements. Numerous organizations
were established during this period, including the Friend-in-Need Society (1858), Prathana Samaj
(1864), Satya Shodhak Samaj (1873), Arya Samaj (1875), the National Council for Women in India
(1875), and the Indian National Conference (1887).
● The Societies Registration Act (SRA) was approved in 1860 to confirm the legal status of the growing
body of Non-Government Organizations (NGOs).
○ The SRA continues to be relevant legislation for NGOs in India, although most state
governments have enacted amendments to the original version.
○ Christian missionaries active in India at this time directed their efforts toward reducing
poverty and constructing hospitals, schools, roads, and other infrastructure.
○ Meanwhile, NGOs focused their efforts on education, health, relief, and social welfare.
○ A firm foundation for secular voluntary action in India was not laid until the Servants of
India, a secular NGO, was established in 1905.

● Mahatma Gandhi’s return to India in 1916 shifted the focus of development activities to economic
self-sufficiency. His Swadeshi movement, which advocated economic self-sufficiency through small-
scale local production, swept through the country. Gandhi identified the root of India’s problem as the
poverty of the rural masses and held that the only way to bring the nation to prosperity was to develop
the villages’ self-reliance based on locally available resources. He also believed that voluntary action,
decentralized to gram panchayats (village councils), was the ideal way to stimulate India’s development.
Gandhi reinvigorated civil society in India by stressing that political freedom must be accompanied by
social responsibility.

PERIOD ACTIVITIES

Pre Independence 1. Phase 1 ( First half of 19th century) - Initiation of Social reform
movements.Focused on the right of untouchables to education, work of choice
and worship, the right of women to education and other social aspects of life.
This gave birth to the idea of voluntary organizations for the first time in Indian
history. Ex - Brahmo Samaj
th
2. Phase 2 ( Second half of 19 century) - unprecedented socio-political awakening
resulted in the blooming of institutionalized reform movements such as the Arya
Samaj, Ramakrishna Mission etc. And this prompted the Government to enact
Societies registration act 1860.

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 3. Phase 3 ( 1900-47) - Social work, constructive action under Gandhian movement
- This phase was very much in consonance with the national freedom movement.
Example - Servants of Society of Gokhale, upliftment of harijans under Gandhi's
leadership.

1950-70 Social Welfare ( Baba Amte’s Anandvan -1949 for caring and giving dignified life to
marginalised people) ,
Government funded and managed NGO like those in Khadi Industry. Most of the
development programmes were implemented by the NGOs since there was deficit in
State’s efforts in areas like Education and Healthcare.

1970-90 Civil Society activities started increasing from 1970s onwards, NGOs started
highlighting why government programmes were not able to reduce poverty and
benefit the marginalised sections since they were bureaucracy led without people’s
participation . They came out with an alternate model for development involving
participation of people and started programs in areas such as education , primary
healthcare ,etc which later got included in government’ s programmes and policies.

1990- present Government and NGOs partnerships increased.

NGOs participation in Policy formulation (RTI) , Policy implementation (Mid-Day
Meal Scheme).
New forms of NGOs like SHGs , Microfinance Institutions

Post-Independence -
● After independence, the Government of India increased its presence in social welfare and development
but recognized the potential for civil society to supplement and complement its efforts. The First Five-
Year Plan stated, “Any plan for social and economic regeneration should take into account the services
rendered by these agencies and the state should give them maximum cooperation in strengthening their
efforts.”
● The Central Social Welfare Board was established in 1953 to promote social welfare activities and
support people’s participation programs through NGOs. This additional funding and recognition led
to a growing body of professional NGOs. The Government of India decentralized development
activities throughout the 1950s. The establishment of the National Community Development
Program and the National Extension Service were early steps in this direction.
● Further decentralization was achieved with the introduction of the three-tier Panchayati raj system in
1958 (given constitutional status in 1973). Many farmers unions and agricultural cooperatives were
founded around this time, and networking became more commonplace in civil society. In 1958, the
Association for Voluntary Agencies for Rural Development (AVARD) was founded as a consortium
of major voluntary agencies. International NGOs entered India in significant numbers to provide
drought relief during two consecutive agricultural seasons, 1965–1966 and 1966–1967. Many of them
established permanent local operations thereafter. Moreover, foreign funds began flowing to domestic
NGOs in India, changing the character of civil society once more.

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 ● During the 1970s the government pursued a “minimum needs” program, focusing on the basic
impediments to improving the quality of life for the rural poor, such as education, electrical power, and
health. Several governmental development agencies were established around this time, such as the
People’s Action for Development of India. Foreign-trained Indians entered civil society in greater
numbers, leading to a professionalization of the sector.
India witnessed a rapid increase in and diversification of the NGO sector as a response to the national
political scenario and increasing concern about poverty and marginalization. Both welfare and
empowerment-oriented organizations emerged during this period, and development, civil liberties,
education, environment, health, and livelihood all became the focus of attention. With community
participation as a defined component in a number of social sector projects during the 1970s and 1980s,
NGOs began to be formally recognized as development partners of the state. their work was
increasingly characterized by grassroots interventions, advocacy at various levels, and mobilization of
the marginalized to protect their rights.
● Changing nature of Civil society - The process of structural adjustment (Liberalization, Privatization
and Globalisation reforms) began in the early 1990s—and the more recent approach of bilateral and
international donors channeling funds directly through the government, NGO networks, and large
corporate NGOs—have somewhat pushed peoples’ organizations into the background. Small,
spontaneous initiatives at the community level, as a response to social and economic exploitations at
the community level, are no longer the hallmark of the NGO sector.

Present situation in India

● India is witnessing a boom in NGO sector, with more than 20 lakh NGOs (that means 1 NGO per 600
people).

Reasons for this boom:

● Economic growth and deepening of democracy
○ Post reforms (NEP 1991) growth led to more wealth creation in the country itself, which
increased availability of domestic funds for the NGO sector.
○ Opening of economy increased number of foreign NGOs ( ex- Transparency International,
Compassion International) in India as well as increased flow of funds from outside the
country. For instance, in 2014-15 around 3000 NGOs received more than 22000 crores from
foreign funding
○ Increasing role of NGOs in governance -
■ Policy Formulation - NGOs are expected to play an important role at policy
formulation stages. For instance, the government comes out with draft policy
document , bills in public domain wherein civil society members including NGOs
can respond over various provisions.
■ Policy Implementation - Ex- Akshay Patra Foundation is involved in
implementation of Mid Day Meal Scheme.
■ Policy Evaluation - NGOs’ role is being explored in social audit committees in
welfare programmes like MGNREGA. Meghalaya has become the first state which
has enacted a law for social audit in all welfare schemes.

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 ○ Supreme court activism has opened space for a large number of civil society organizations to
participate in the delivery of justice. For instance, PUCL has adopted the route of PIL to bring
issues of democracy in front of judiciary.
○ Increase in funds available through CSR route after 2013 amendment in Companies Act.
Many companies have opened their own subsidiaries which work in social sector.
● Perceived and demonstrated inadequacies of the state led development
○ Failure of government/ state led development - in spite of large role played by the
government, India is not able to tackle a large number of issues. Still, Challenges of corruption,
policy paralysis, poverty, etc. Remains, this has enhanced importance of NGO sector in
improving governance as well as filling in where there are gaps in government intervention
such as those in the field of education and primary healthcare.
○ Government lacks resources such as manpower and infrastructure to work efficiently at grass
root levels. In contrast, NGOs have expertise in their area of work and are also able to mobilize
participation of community in which they work. For instance, Ramkrishna Mission is
working in remote tribal areas where government’s reach is low.
○ Government’s failure to rehabilitate development project affected people like those
displaced by construction of big dams. This gap is filled by NGOs like Narmada Bachao
Andolan which works for people displaced by the Sardar Sarovar Dam.
○ NGOs are active in tackling issues related to marginalised sections like women, manual
scavengers, widows, etc. For instance , SEWA is active in empowering women workers in the
informal sector. CRY and Bachpan Bachao Andolan are working for ensuring child rights.
○ NGOs have been at the forefront of ensuring reforms in governance through activism. For
instance, Mazdoor Kisan Shakti Sangathan (MKSS) is the organization which has led the
people movement for transparency in governance, which ultimately led to the enactment of
RTI Act. Association for Democratic Reforms (ADR) is working for bringing in electoral
reforms.

TYPES OF NGOs
● Traditional Development NGOs - These NGOs directly engage with the public, they go to villages,
tribal areas and undertake development activities related to education, health, sanitation, rural
development, etc. Example- Baba Amte’s Anandvan where leprosy patients were given treatment and
other support. They are thus engaged in direct social intervention.
● Activist NGOs - They are those NGOs which try to influence government policies and decisions
through activism, organizing protests, demonstrations, moulding public opinion. Examples - Narmada
Bachao Andolan (NBA) , India Against Corruption , Chipko movement.
● Research NGOs - They carry out studies and research on certain areas to come out with information
through which they lobby government, industry bodies and other agencies to influence public policy.
Example - Centre for Science and Environment which tries to inform and influence policies related
to Environment.

REGULATORY FRAMEWORK
Constitutional Provisions -
● Article 19 (1)(c) - Right to form associations

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 ● Article 43 - State to promote cooperatives in rural areas
● Concurrent List - deals with “Charities and charitable institutions, charitable and religious
endowments and religious institutions”.

Registration -
Laws in India classify organizations working in development into three categories:
● Charitable Trusts,
● Societies
● Charitable Companies - set up under the Companies Act, 2013. For charitable companies, the
compliance requirements are high, as loans and advances are easily available to them compared to a
trust or a society.

Whether registered as a trust, society, or company, NGOs are subject to the Societies Registration Act of 1860
and the Income Tax Act of 1961. Trusts are subject to the Public trust Act (1976) and are, in addition to federal
regulations, governed by the state office of the charity commissioner.
NGOs are not required to register with the government. However, registration allows an NGO to deduct
expenses from income for tax purposes, receive foreign contributions, and be considered for government grant-
in-aid schemes. Registration also facilitates domestic fundraising, as the income tax act permits donors to
deduct contributions made to register NGOs.

Foreign Contribution (Regulation) Act (FCRA) - Provisions and Issues:

The intent behind this Act is to prevent use of foreign contribution for any activity which is detrimental to the
national interest.
Provisions -
● Scope of the law - It is applicable to a natural person, body corporate, all other types of Indian entities
(whether incorporated or not) as well as NRIs and overseas branches/subsidiaries of Indian companies
and other entities formed or registered in India
● Organizations receiving foreign contribution must abide by the Foreign Contribution Regulation Act
of 1976, and are regulated by the Ministry of Home Affairs (MHA).
● Restrictions on acceptance of foreign funds - It allows only NGOs having a definite programme in
cultural, social, economic, religious or educational areas to receive foreign funds. Additionally, that
NGO has to either obtain a certificate of registration or prior permission from the MHA.
● Restrictions on usage of foreign funds -
○ Stated Purpose - Foreign funds can be used only for the stated purpose for which they are
received
○ Such funds cannot be used for speculative activities.
○ Transfer of funds - Such funds cannot be transferred to any entity which is not registered or
has Prior Approval under the act , without the prior approval of the authority.
○ Purchase of assets - Assets purchased through the foreign funds have to be in the name of the
NGO, not its office bearers or members.
● Reporting Requirement -
○ Any foreign contribution to an NGO must be reported to the central government within 30
days of its receipt.

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 ○ All NGOs registered or having prior approval under the Act have to file an annual report with
the Authority, along with an income and expenditure statement, receipt and payment account,
and balance sheet for the relevant financial year.
● Thus, it regulates the inflow and usage of foreign funds by providing for a mechanism to accept, use
and report usage of the same.
● In case of non-compliance with the FCRA, the government can penalize an NGO. In the recent years,
licenses of around 20,000 NGOs have been canceled by the central government since they were found
violating various provisions of FCRA act. These NGOs were thus barred from receiving any foreign
funds.

FCRA 2010 amendment -

● Barred organizations of ‘political nature’ from accepting foreign contributions.
● Mandated organisations receiving foreign funding are required to renew their licenses every five years.

FCRA and Political Parties -

● In 2014 Delhi High Court found that two national parties, BJP and Congress, had flouted FCRA, 2010
by receiving funds from Indian subsidiaries of a foreign company Vedanta. In 2016, the government
retrospectively amended FCRA 2010 to allow for receipt of funds from a subsidiary of a foreign firm,
where the foreign shareholding is 50%. It mandated that such a company (subsidiary) would not come
under the definition of “foreign source” under FCRA.
● Impact of this amendment -
○ Legalized receipt of foreign aid from Indian subsidiaries
○ Eased CSR spending by Indian subsidiaries since repetitive consent from the Home ministry
was no longer needed.
○ Improved foreign funds access of NGOs (except for the prior permission category NGOs).

NATIONAL POLICY ON THE VOLUNTARY SECTOR

● In May 2007, the cabinet of ministers of the Government of India approved the National Policy on the
voluntary sector as the first step in a process to evolve a new working relationship between the
government and volunteer organizations.
● Through the policy, the government commits to encouraging, enabling, and empowering an
independent, creative, and effective voluntary sector with diverse form and function, so that it can
contribute to the social, cultural, and economic advancement of the people of India.
● It recognizes that the voluntary sector has contributed significantly to finding innovative solutions to
poverty, deprivation, discrimination, and exclusion, through awareness raising, social mobilization,
service delivery, training, research, and advocacy.
● The policy identifies four objectives :
1. Create an enabling environment for volunteer organizations that stimulates their enterprise
and effectiveness, and safeguard their autonomy.
2. Enable volunteer organizations to legitimately mobilize necessary local and foreign financial
resources.
3. Identify systems by which the government may work together with volunteer organizations,
based on the principles of mutual trust and respect, and with shared responsibility.

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 4. Encourage volunteer organizations to adopt transparent, accountable systems of governance
and management.
● Among the specific central government actions cited in the policy, are encouraging state governments
to simplify, liberalize, and rationalize laws and rules on registration of volunteer organizations;
examining the feasibility of enacting a simple, liberal central law to serve as an alternative all-India
statute for volunteer organization registration; and encouraging the evolution of an independent,
national self-regulatory agency for the voluntary sector.
● The terms “VO” (voluntary organization) and “NGO” (non-government organization) are often used
interchangeably in India. However, some draw a distinction between the two, arguing that voluntary
organizations are a subset of NGOs and distinguished by the spirit of volunteerism and independence
from government and business.

ROLE PLAYED BY NGOs IN OUR SOCIETY

Justice - Human Service to people,

Rights, Women animals.
rights, Child rights Ex - Anandwan,
Ex - Amnesty Wildlife SOS (for
International animals)

Development- Protection of
Ex- SEWA (women Environment - Ex -
empowerment), Role played WWF, Centre for
Pratham Science and
(Education)
by NGOs Environment

Relief and
Governance – Reforms and
Rehabilitation -
Participation
Ex - Disaster relief - Post
Ex - Electoral Reforms - ADR;
2004 Tsunami; Shelter
Akshay Patra Foundation
homes for homeless,
(Implementation of Mid-Day
vulnerable women
Meal Scheme)

● Service role - NGOs like Pratham- Working in the education sector, Baba Amte’s Anandvan -
providing healthcare and other support to the marginalised sections of the society.
● Governance -
○ Improving governance - NGOs have been at the forefront of the fight for reforms in
governance. For instance, MKSS led the movement towards transparency in the government
which led to the enactment of RTI Act. Similarly, India against Corruption mobilized public
opinion which pressurised the then government to enact the Lokpal Act. Another organization
which is working towards governance reforms is ADR (Association for Democratic
Reforms) which is working towards bringing in electoral reforms in the country so that
Political ills like Criminalization of Politics use of money power in elections, etc.

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 ○ Implementation of welfare schemes - In Schemes like Mid-Day Meal, MGNREGA NGOs
are involved in improving efficacy of the schemes. In Mid-Day Meal Scheme, Akshay Patra
Foundation is involved in providing meals to the school children. In the case of MGNREGA,
NGOs are involved in social audit of the implementation of the scheme.
● Development -
○ Building Community Participation - The non-profit organisations offer alternative
perspectives for development; and have the capacity to conduct a meaningful dialogue with
communities, particularly those that are disadvantaged. One such organization is Paani
Foundation which is helping solve the water crisis in the drought-hit districts of Maharashtra.
It provides scientific training to villagers in Watershed management along with helping them
in developing community participation and leadership.
○ Acts as channels for donors to provide international development funds to low-income and
developing countries - World Bank and other multilateral development funds look for
partnerships with local NGOs to implement development projects
● Justice -
○ Human Rights watchdog - Amnesty International, Save the Children ( Bachpan Bachao
Andolan), CRY (Child Rights and You) are some of the NGOs that working towards Human
Rights in the Country.
○ Advocacy and Activism - NGOs play a vital role in giving voice to the voiceless. By working
for marginalised sections of the society, NGOs help bring their issues out to the government
and to the public at large. In India, NGOs like Naz Foundation were behind the scrapping of
Section 370 of IPC, leading to decriminalization of Homosexuality in India thus allowing for
dignified existence of LGBTQ community in the country. Similarly, NGOs like Safai
Karamchari Andolan have been working towards elimination of manual scavenging from
India alongwith rehabilitation of communities involved in this practice.
● Relief and Rehabilitation -
○ Post 2004 Tsunami, NGOs helped in relief operations as well as helped in imparting
vocational training to the affected people
● Protection of Environment - Rapid economic growth is leading to a range of environmental issues like
Pollution (Air, water, soil), deforestation, biodiversity loss, climate change etc. Various NGOs have
been working in dealing with these environmental challenges.
● Research role - providing information support to the government for policy making. Example - Centre
for Science and Environment (it comes out with its own magazine Down to Earth), TERI are involved
in this conducting research on environmental issues. Bombay Natural History Society (BNHS) -
conducts field research projects on bird migration.
● Campaigning role - for global treaties. Major campaigns run by NGOs -
o Climate Change
o Protection of Pristine forests
o Protection of marine life and diversity
o Against whaling
o Against Genetic Engineering/ GMOs
o Prevention of Nuclear Threat to wildlife
o Elimination of chemical and biological toxic waste

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 o Encouragement of sustainable trade
● Mass awareness campaigns for promoting ecologically sustainable practices like waste disposal
through vermiculture and composting instead of landfills or promoting the use of bicycles and green
renewal fuels instead of fossil fuels.

CHALLENGES RELATED TO NGOs IN INDIA

● Lack of Funds - Most NGOs in India are suffering from lack of funds and depend on government aid.
And there are issues with the government aid such as delay in sanction of funds and inadequacy of
amount. Also, NGOs have to make matching contributions which they find difficult to manage and are,
therefore, sometimes unable to obtain government aid.
● Inadequately Trained Personnel - NGO sector needs dedicated and properly trained personnel. Lack
of professionally trained manpower is one of the major challenges faced by NGOs in India.
● Misuse of Funds - It is often found that there are serious charges of misappropriation and misuse of
funds against NGOs. Many NGOs don’t have sophisticated finance and legal teams, nor do they have
the funds to conduct audits.
● The issue with external funding- According to government data a total of 3,068 non-governmental
organizations (NGOs) received foreign funding above Rs. 22,000 Cr in 2014-15. It is often reported by
the intelligence agencies that these foriegn funded NGOs are used by the vested interests in foreign
countries to stall development projects in India. . One such NGO is Greenpeace. The Intelligence
Bureau of India allegedly leaked a report accusing Greenpeace of anti-development activities.
● Nonaccountable, nontransparent undemocratic functioning - CBI records filed in the Supreme
Court have shown that only 10% of the total registered NGOs under the Societies Registration Act file
annual financial statements.
● Money Laundering - Corrupt or unscrupulous NGOs can be used for laundering money through
foreign funding.
● Inequality in rural areas - Because of lack of availability of minimum comforts in rural areas NGO
personnel prefer to stay in urban areas. Ignorance and backwardness among rural people also add to low
level of development of NGO sector in rural areas.
● Lack of Volunteerism / Social Work among Youth - Volunteerism is the fundamental characteristic
of the NGO sector. But volunteerism is increasingly replaced by professionalization since young
graduates in social work are more interested in pursuing a career in professionalism.

SUGGESTIONS TO IMPROVE THE WORKING OF NGOs :

● Liberalization of regulation related to government aid as well as increasing the amount of sanctioned
money.
● Enquiry into misuse of funds by the NGOs by setting up of Commissions of enquiry.
● A regulatory mechanism to keep a watch on financial activities of NGOs.
● Coordination between the Ministry of Home Affairs and Finance for monitoring of use of illicit and
unaccounted funds by NGOs.
● Encouraging volunteerism - universities should collaborate with NGOS and conduct campus
interviews for interested young graduates. NSS and NCC can be used to inculcate spirit of
volunteerism in children from a young age.

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 ● Encouraging NGOs in rural areas - About 60 % of our population lives in rural areas , which are also
marked by low levels of human development. Thus NGOs need to encourage rural youth to engage in
volunteerism. Government should also give incentives to NGOs working in rural areas such as
lowering eligibility conditions for grants.
● Encouraging efficiently working NGOs - Government should give awards and other rewards to high
performing NGOs , this would encourage other NGOs to improve their functioning.
● Training of personnel - Separate funds should be allocated for the same.
● Use of technologies - latest technologies like the internet for raising funds, selection of personnel,
advertising products and form networks with other organizations.
● A National Accreditation Council to ensure compliance by NGOs - it should consist of
academicians, activist and retired bureaucrats.

WAY FORWARD
NGOs have emerged as an important player in improving governance today. Governments across the world
including in India have been acknowledging their importance as an important partner in both governance as
well as in developmental efforts. Thus, instead of putting restrictions on their functioning , the government
should facilitate their participation while at the same time ensuring that they function in a transparent and
accountable manner.

Previous Year Mains Questions -

● Examine critically the recent changes in the rules governing foreign funding of NGOs under the
Foreign Contribution (Regulation) Act (FCRA), 1976. (2015)
● How can be the role of NGOs be strengthened in India for development works relating to the
protection of the Environment? Discuss throwing light on the major constraints. (2015)

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