NGOs violating FCRA

As many as 156 NGOs’ licences have been suspended for six months by the Ministry of Home Affairs for violation of rules under the Foreign Contribution Regulation Act and the immediate impact of it would be their inability to receive foreign funds while 36 others organisations that complied with the guidelines have been made free of the earlier restrictions for noncompliance of the requisite rules. There has to be a set procedure which the NGOs have to follow especially when funds are received from sources from outside the country and are, therefore, required to open accounts with designated banks that follow Central Government’s Public Financial Management System (PFMS). A list of such Banks has already been provided by the Government to the NGOs. Despite repeated reminders these 156 NGOs have not complied with the procedure resulting in suspension of their FCRA registration which means that they cannot accept or receive any foreign contributions and funds.
Not only this, the end use of the massive foreign funds by most of these NGOs too is very often the subject of controversy as there are reports that most of these funds have been misused for promoting activities and protests to stop State and Central Governments from undertaking developmental projects. It may be noted that the PFMS functions under the Controller General of Accounts in the Ministry of Finance and it provides a financial management platform for all plan schemes, a database for all recipient agencies where effective tracking of fund flow and the most important aspect of transparency are taken care of. The Act, if violated, provides a scope of the intentions to breach transparency and plaque end use of funds.