Monday, January 30th, 2023 06:23:33

Government’s Discomfort Over NGOs

Updated: March 14, 2015 9:20 am

Non-Governmental Organi-sations’ (NGOs) uneasy relation with the government in India has surfaced once again. The government is groping for a policy framework to streamline and ‘regulate’ activities of and flow of foreign funds to the NGOs, which is perceived to be behind the strength and influence of some of them; many of which indulge in advocacy and socio-political mobilizations against government policies. Even the United Progressive Alliance (UPA) government that had incorporated selected NGOs in the ‘parallel’ cabinet National Advisory Council (NAC), grew ambivalent of foreign their funding and displayed the Indira Gandhi itch that resulted in 1976 in the Foreign Contribution Regulation Act (FCRA). In 2013-14, then Finance Minister P. Chidambaram had framed stiff regulations as to what the foreign donors, even those who were in bilateral collaboration with governments, could fund; thus shutting a number of ongoing research and other collaborations. Some agencies folded up operating units from India. He also put the onus of the FCRA on the foreign donors, which was earlier applicable for regulating the recipient organisations only.


NGOs are decidedly the most loosely and ‘negatively’ nomenclatured entity across the world. Why are they defined as what they are not? Are they comfortable with this characterization? Haven’t they thought of renaming themselves and their role, as their not being governmental organisations does not give any idea about their role? These and several questions deserve response in local, national and international contexts.

Soon after it was formed, the United Nations Organisation (UNO) looked at organisations outside the two established ones—the government and the market. A number of voluntarily created self-help groups and do-gooder organisations that were considered useful in a number of developmental initiatives were termed NGOs for want of any other terminology. The World Bank in its Operational Directive on NGOs (No.14 70 August 1970) defined the term of ‘NGOs’ as: ‘The groups and institutions that are entirely or largely independent of governmental and charecterised primarily by humanitarian or cooperative, rather than commercial objectives.’ The World Bank describes the NGO sector as ‘diverse and dynamic’ and ‘vary greatly in skills, capacity, effectiveness and motivation’ and acknowledges its rapid growth since the 1980s accompanied with an enormous broadening and diversification within it.


Sociologists define NGO organisations as possessing four defining characteristics, enabling them to be distinguished from other organisations in civil society—voluntary, dependent, not-for profit, self-serving. In recent decades, NGOs have been engaged in all sectors of social life—relief, rehabilitation, health, education, development programmes, peace, human rights, environment and so on. They have used finance raised from voluntary, private sources, and donor agencies and managing themselves autonomously at local, national and international levels. Many have grown in size, having national and international level branches, employing a large number of paid employees and volunteers. The NGO sector has evolved from being a bunch of do-gooders not too apt in organisational capacities, to organisations with high management skills, employing trained managers. They have also been referred as Non Profit Organisations and Civil Society Organisations, the latter nomenclature has raised questions on its origin in the East European crisis and a broad canvass. Given their involvement with mobilization on rights-based issues and against ‘anti-people’ policies of governments, they have also been characterised as non-party political formations. Roy Jenkins thus captures their existence as a ‘non’: ‘In the usage that predominates in India’s contemporary political discourse, an NGO is not just a non-state actor; depending on who is doing the defining, there are any number of things that NGOs are not. They are not political parties; they are not social movements; they are not labour unions; they are not even, according to their critics, agents of popular struggle at all. Indeed, apart from its status as an entity distinct from government, existing within a realm of associational freedom, the Indian NGO’s defining characteristic is its constitutional inability to engage in politics—except, it would seem, as an unwitting tool of larger forces. Or so the NGOs’ myriad detractors would have us believe.’

The Indian story of voluntary work—charity, social reform, education, gender issues, development, et al.—is among the oldest, but we have recorded evidence of it since the beginning of the Indian renaissance in the early nineteenth century when old values were challenged and a range of activities geared at societal rebuilding were initiated. A number of social organisations such as Brahmo Samaj and the Young Bengal Movement (1828), the Aligarh Movement (1860 onwards), Veda Samaj (1864), Prarthana Samaj (1867), Satya Shodhak Samaj (1873), Arya Samaj (1875), Theosophical Society (1879), Shree Narayana Dharma Paripalana Yogam (1903) came up across the country and all had their own success story in reforms, social awakening and community participation. Their community traditions aided beginning of the Indian National Movement.

They left a trail of tradition after independence. Acharya Vinoba Bhave initiated Bhoodan Movement in 1951 in Telangana that contributed to the end of the Telangana movement; it may not have succeeded in the long run though. In the late 1960s and early 1970s, several middle-class initiated ‘NGOs’ focused on empowerment with development. However, the tradition of voluntary work that eventually linked to development of ‘NGOs’ is traced to the success of experiments in Ralegan Siddhi, a village in Ahmednagar district in Maharashtra in 1975. Appalled by the state of environmental and economic degeneration and drought on return to his village after retirement from the army, Anna Hazare used simple efforts for environmental restoration with community efforts; it was declared by the World Bank as a model village. It lent faith in community efforts in development that were till then dependent on corporate philanthropy. By 1980s such voluntary work caught on in a variety of fields, so much so that even the government began looking forward to tapping the community energies for its rural development programmes. Multilateral agencies such as the World Bank, UNDP, ILO, UNICEF, international governmental agencies set up for community development and many foreign based foundations gave programme-based funding to several government and non-government agencies. Their growth in India thereafter is history.


Historically, such associations emerged and evolved as voluntarily formed community associations since the nineteenth century; hence the name voluntary associations or voluntary organisations. Since financial contributions too were voluntarily made, collective accounting system perhaps prevailed without much institutional paraphernalia. However, with institutional funding coming in, the need for formal accounting procedures arose and other institutional formations became necessary. It is not a matter of coincidence that the British Parliament enacted Societies Registration Act in 1860 for charitable, literary and scientific societies in India; the objective appears to be regularizing, supervising, even regulating, the activities of societies that were appearing across the country since the early 1880s. Though the colonial government’s stated objective was to give fillip to altruistic and charitable activities, one of the several regulatory legal frameworks emerging after the 1857 revolt, an unstated objective of creating a legal leash cannot be ruled out.

It remained the legal framework after independence too, though it was left to the states to modify it and suit their requirements. Consequently, several states drafted a fresh Act and created a Registrar of Societies for executing registration in accordance with the law and monitoring through submission of annual reports and records of AGM. The Act was not meant to either cater to or encourage NGOs/Voluntary Organisations; framed with a broad framework, it became the basis on which form a housing to educational to health to ‘you-name-it’ societies could be and have been formed over decades. Many die a natural death for a variety of reasons, but they continue to remain on records. The offices of Registrars of Societies across the country are understaffed (those posted there are disinterested and couldn’t care less) and underprovided; one has to visit one of them to believe it. Given the complexity of the law, these are also ridden with (small)

Those working in the arenas of development, rights, environment, conservation, et al, have been using this legal framework to set up institutions that were loosely termed by the 1970s as voluntary organisations. Many have not been comfortable with the negative nomenclature NGO, but it is internationally sanctioned, so it is not only used, it has stuck. Through the 1970s and 1980s, voluntary organisation was used within the sector, which sprang the question that since many of them were paid, professionals, even jet-setting jholawalas, how were they voluntary. What was ignored, perhaps deliberately, that many worked in areas where the government was present only on paper and public servants desisted from going. Many picked up issues and services that the government would keep poles away from. They worked in experimental mode, learning as they went along with people and folk wisdom. Their flexibility in altering their priorities and strategies won them hearts as they showed results that sustained; it won them adversity too, for the local politicians and bureaucracy felt exposed. Not only the international organisations, but also the government began to use them for efficacious service delivery.

Identity remained an issue; many preferred ‘Third Sector’ as ‘voluntary’ as the nomenclature for paid work was questioned. Indeed, a theoretical difference between ‘voluntarism’ (i.e., working voluntarily for social welfare either without payment or with a small honorarium) and ‘volunteerism’ (i.e., a professional, trained and dedicated-to-a- cause volunteer working for a salary) was made, but remained unacceptable in the political and official circles. The 1990s witnessed the debate whether the NGO ‘professionals be paid as much as in public or private sector; whether this would compromise the voluntary nature and their work. It has brought reasonably good salary in the sector, but several in the sector nonetheless still work at not-so-attractive, even irregular, remuneration.

As activities of the effective ones increased, institutional questions stared them at face; many not having any professional experience began defaulting. Institutional reporting to the Registrar of Societies, funds needed accounting, auditing, reporting to the Income Tax and, since 1976, registration and reporting to the Foreign Contribution Regulation Act (FCRA). Since the late 1980s those who could afford, began hiring management professionals and social work graduates from universities as well as graduates from the Institute of Rural Management Anand, many of them started their own organisations. Also, the comity of NGOs/VOs looking at themselves as a sector, created support institutions to help smaller initiatives and organisations.


The national emergency in 1975 for the first time made the government (rather the politics running the government) realise that the phenomenon called the NGO, which received funding from the government (the government in India does not look at it as public funding) and from ‘foreign’ sources. The 1970s was a decade of fear psychosis cultivated against ‘foreign hand’. Public protests were described organised by this invisible ‘hand’. The months leading to the emergency witnessed several NGOs and Gandhian organisaitons participating in the JP movement and opposing Indira Gandhi’s rule and pressing for her resignation in the wake of the Allahabad High Court judgment. Since the influential ones were dependent on funds from the multilateral organisations and foreign foundations, the FCRA could be a handle to regulate them. That the government was stressing ‘security’ over financial aspect was obvious from keeping the FCRA with the Ministry of Home Affairs rather than Ministry of Finance.

Surprisingly, the Janata Party Government did not consider either repealing the FCRA or shifting it to the MoF. Contrarily, on her return to power in 1980, Indira Gandhi appointed (Puroshottam Das) Kudal Commission (1982) to inquire into the funding and functioning of three Gandhian institutions—the Gandhi Smarak Nidhi, the Gandhi Peace Foundation and the Sarva Seva Sangh and the Association of Voluntary Agencies for Rural Development. The allegations against these institution, extended to any other in this sector speaking against the government, the party and the leader, was working against the interest of the country with foreign money, particularly from the CIA. The Commission carried out a witch hunt, crippled these agencies without any substantive evidence, and along with them nearly 1,000 smaller VOs without finding any foreign funding. The FCRA became stiffer in the 1980s with the stipulation of registration with the MHA, the wing that allegedly turned into a den of corruption.

In 1993, Bunker Roy, a prominent member of this sector and earlier an advisor to the Planning Commission, raked up a controversy, allegedly at the behest of the government, calling for a ‘Code of Conduct’ for the voluntary sector and how foreign funding was a threat to volunteerism. The sector reacted against a government intervention, but set Voluntary Action Network Action India that framed ‘Guiding Principles for the Voluntary Sector.’

Pressurized by the voluntary sector to formulate a coherent policy on the issue prior to the World Summit on Social Development (1995), the P.V. Narasimha Rao government organised a consultation towards the end of 1994 focusing on a NGO Policy and an Action Plan for facilitating their work. A document ‘Simplification of Procedure for Effective Funding’ resulted from it. Also, four Task Forces were set up at on ‘Rules and Regulations’, ‘NGO Government Collaboration’, ‘Non-interference in NGO work by the Government’ and ‘State Governments, Union Government and NGOs’. A document ‘Action Plan to Bring About Collaborative Relationship between Government and Voluntary Sector’ resulting from the exercise was approved by the Cabinet, but its implementation remained tardy. In 2001, Planning Commission formed a four-member committee at the behest of N.C. Saxena, then it’s Secretary, through the Centre for People’s Action for Rural Development. The MHA declined to accept the report forwarded by the Planning Commission.

The FCRA survived. In the mean time, NGOs began a campaign for scrapping of the FCRA. It was pointed out that any money for subversive activities does not come through the FCRA route; if at all, they follow the havala route. This argument did not impress the political class. Instead, the voluntary sector suggested inserting a section in the existing Foreign Exchange Management Act (FEMA). This did not require a registration, brought the NGOs under the MoF and reporting of receipts and usage of foreign exchange as in all FEMA cases was left to the receiving bank. to the government annually. Obviously, the government did not accept it as security consideration resulting from foreign funding appeared overwhelming for the government.

The love-hate relationship between the government and the VOs has continued in India with each regime. In both its avatars the UPA had the selected organisations as part of the NAC, but neither the FCRA was relaxed, nor other enabling reforms were undertaken for the sector. In fact, in 2013 the MoF tightened the FCRA regime by imposing prohibitive conditions for the donors. Several programmes had to be folded up mid-way. The new government after the sixteenth general election in 2014 also appears in the same mode. The discourse gives the impression that there is overwhelming suspicion of the christian NGOs.


Are the suspicion and fears generated by the political class, in and out of power, over the foreign funding creating instability genuine? During Indira Gandhi’s regime ‘foreign hand’ in every contrarian political activity had become a butt of joke. No government and/or political party have given the nation any proof of subversive activities carried out through the NGO activity. They governments also indulge in double talk and opaque policy measures in this regard. For example, in 2002, a report titled The Foreign Exchange of Hate: IDRF and the American Funding of Hindutva, put together by a group called The Campaign to Stop Funding Hate, claimed that Maryland, USA based the India Development and Relief Fund had sent more than $3 million to RSS and its affiliates in India, but its documented report was ignored.

Two points need mention here. First, the nervousness of political class in India about the popular sway of the voluntary sector could spill into political arena has led to security related regulations. Several well-researched studies, this author has been part of two, have shown that developmental activities lead to rights and resources based tussle with the dominant classes, which willy nilly spills into political arena. The grass roots uneasiness over an encroachment of their turf with conscientization of the marginalized, the political class has used state power to stone wall them within a limited turf. Second, the red herring of security arises out of the thin popular turf that political parties walk on.

By Ajay K Mehra

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