“Light Regulation” for NGOs. Let’s keep our fingers crossed!

Readers may recollect that in January 2017, the Supreme Court Bench of Chief Justice of India J.S. Khehar and Justices N.V. Ramana and D.Y. Chandrachud has directed the government to audit nearly 30 lakh NGOs which received public funds, but, consistently failed to explain how they spent the money. 

The Supreme Court bench had given this decision in response to a writ petition filed by Advocate Manohar Lal Sharma. The court had also ordered that any NGO found to have cooked its books or indulged in misappropriation should be subject to immediate criminal prosecution. Besides, the government should initiate civil recovery proceedings against such rogue organisations. The Supreme Court has also demanded that the government file a compliance report by March 31, 2017.

Now, a high-power committee appointed by the Central government on the orders of the Supreme Court has recommended several steps to ensure the “light regulation” of non-governmental organisations (NGOs) so as to reduce their harassment. A shortened version of the recommendations is now before the Supreme Court, though the government is yet to accept the full set.

The committee, headed by S. Vijay Kumar, a former Secretary in the Ministry of Rural Development, was formed as part of the Centre’s response to the ongoing writ petition filed by Manohar Lal Sharma. On the Supreme Court’s suggestion, the committee has also drawn up a framework of guidelines for the accreditation of NGOs (through Niti Ayog), audit of their accounts, and procedures to initiate action for recovering grants in case of misappropriation.

The committee has recommended that:

• The registration procedures be modernized so as to facilitate the seamless operation of the applicable provisions of Income Tax Act and the Foreign Contribution Regulation Act with respect to NGOs, without the need for cumbersome and intrusive processes.
• Steps must be taken to reduce the need for physical interface between NGOs and public officials acting under the Income Tax Act and FCRA, along with reduction in mutual distrust and scope for misuse.
• A separate law for voluntary agencies engaged in activities of a charitable or “public good” nature to enable more effective and efficient regulation of the sector.
• Regulation should be ‘light’ and consistent with the fundamental rights, so as to give effect to the objects for which voluntarism is being promoted.
• Replace various State-level and existing Central laws with an overarching legislation with best practices.
• Details of NGOs should be available as searchable database information.
• The new framework should enable ‘national uniformity’ of approach following the principle of ‘cooperative federalism’.
• ‘Light regulation’ of NGOs

All this sounds like a dream come true. But, there is a wide gap and many a slip between good ‘intent’ and ‘implementation’. Hence, for the exciting and interesting times that we presently live in, our fingers remain tightly crossed.

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