Non-Governmental Organisations (NGOs)

When we move from the idea of civil society to action on the ground, we enter the domain of Non-Governmental Organisations (NGOs).
If civil society is the voice, NGOs are the hands and feet of that voice.

According to the World Bank, an NGO is:

A not-for-profit organisation that works to relieve suffering, promote the interests of the poor, protect the environment, provide basic social services, or undertake community development.

Simply put, NGOs exist where the market finds no profit and the state finds difficulty in direct delivery.

Legal Status of NGOs in India

In India, NGOs are recognised under three legal forms, which give them legitimacy and structure:

1️⃣ Societies

• Registered under the Societies Registration Act, 1860
• Commonly used for education, culture, and awareness activities

2️⃣ Trusts

• Governed by the Indian Trusts Act, 1882 or respective State Trust Acts
• Popular for charitable and religious work

3️⃣ Section 8 Companies

• Registered under the Companies Act, 2013
• Created exclusively for charitable objectives with stricter compliance norms

👉 These forms ensure accountability, continuity, and legal oversight.

📊 Scale and Significance

• As per Ministry of Statistics and Programme Implementation (2019), India has around 3.2 million NGOs
• This number exceeds schools and health centres, showing how deeply NGOs are embedded in India’s development process

👉 India’s welfare architecture is unimaginable without NGOs.

⚖️ Constitutional Provisions Related to NGOs

While the Constitution does not explicitly mention “NGOs”, it creates a supportive ecosystem:

• Article 19(1)(c) – Right to form associations
• Article 43 – Promotion of cooperatives in rural areas
• Concurrent List – Charitable and religious institutions

👉 NGOs are thus constitutionally enabled, not constitutionally restricted.

Role of NGOs in Governance

1️⃣ Implementers of Welfare Schemes

NGOs act as a bridge between government and beneficiaries, especially in:

• Outreach
• Last-mile delivery
• Real-time feedback
• Example: Self Employed Women’s Association (SEWA) in Gujarat supports women-centric welfare schemes.

2️⃣ Catalysts and Collaborators

NGOs:

• Pilot innovative ideas
• Offer grassroots insights
• Help improve scheme design

👉 They convert policy intent into practical outcomes.

3️⃣ Advocates for Social Justice

NGOs highlight issues often ignored by the state → Caste discrimination, Gender injustice, LGBTQ+ rights

Example: Naz Foundation, which played a key role in the decriminalisation of homosexuality.

4️⃣ Environmental Protectors

NGOs engage in → Environmental advocacy, Legal interventions, Community mobilisation

Examples → WWF-India, Vanashakti

5️⃣ Awareness Builders

NGOs educate citizens about → Rights, Laws,  Welfare entitlements

👉 Awareness converts beneficiaries into rights-holders.

Impact of NGOs

• Improved scheme effectiveness – Better targeting and transparency
• Policy and legal reforms –
  • Example: Centre for Social Research strengthened implementation of the PCPNDT Act
• Socio-economic development –
  • Example: Goonj transforms urban waste into rural development resources
• Environmental protection – Conservation and pollution control
• Human rights protection – Legal aid, dignity, and justice for vulnerable groups

Challenges Associated with NGOs

1️⃣ Legitimacy and Accountability Issues

• CBI (2015): One NGO for every 600 Indians
• Only 10% NGOs file proper income–expenditure statements
• Allegations by Intelligence Bureau against some foreign-funded NGOs for influencing protests and economic activity

👉 Raises concerns about transparency and national interest.

2️⃣ Corruption and Misuse of Funds

Cases of fund misappropriation have emerged:

• Association of Moral Guide and Service to Poor (Odisha)
• Asha Bal Mandir Shiksha Samiti (Jaipur)

3️⃣ Legal and Regulatory Constraints

• Foreign Contribution Regulation Act (FCRA) amendments have:
  • Reduced administrative flexibility
  • Increased compliance burden

4️⃣ Urban–Rural Inequality

• Urban NGOs are stronger than rural NGOs
• Causes: lack of infrastructure, awareness, and incentives for social workers

5️⃣ Declining Volunteerism

• Social work becoming professionalised
• Youth increasingly viewing NGOs only as career options

6️⃣ Lack of Funds

• Delayed grants
• Partial funding
• Heavy dependence on uncertain donations

Government Measures to Regulate NGOs

🔐 Strengthening FCRA Compliance

• Detailed disclosure of assets created from foreign funds
• Time limits on utilisation (3–4 years)

❌ Cancellation and Rejection of Licenses

• Over 6,600 NGOs lost FCRA registration in last 5 years
• In 2024, registration of Centre for Policy Research was cancelled
• In 2025, 466 NGOs were denied renewal

🧭 Institutional Oversight

• NITI Aayog as nodal agency
• NGO DARPAN Portal – digital registry and coordination platform

📑 Vijay Kumar Committee

• Recommended searchable NGO databases
• Supported NITI Aayog as nodal body for coordination

How to Strengthen NGOs’ Role

• Policy Involvement
  Include NGOs in policy formulation, especially in areas like environmental governance, by leveraging their grassroots experience and field-level insights.
• Capacity Building
  Strengthen NGOs through training, technical tools, and knowledge support to improve their organisational efficiency and impact.
• Funding Support
  Enhance access to domestic and foreign funding, and provide tax incentives to ensure financial sustainability.
• Collaboration
  Promote multi-stakeholder partnerships involving NGOs, government agencies, and the private sector for better service delivery.
• Public Awareness
  Encourage NGOs to mobilise citizens and generate awareness on social and environmental issues, strengthening participatory governance.

RTI and NGOs

In a landmark judgment (D.A.V. College Trust and Management Society vs. Director of Public Instructions, 2019), the Supreme Court ruled that NGOs receiving substantial government funding fall under the ambit of the Right to Information (RTI) Act, 2005.

Public Authority under the RTI Act

As per Section 2(h) of the RTI Act, 2005, a public authority includes any authority, body, or institution of self-government:

• Established or constituted by:
  • The Constitution
  • Any law made by Parliament or State Legislature
  • Notification issued by the appropriate government
• Also includes any non-government organisation substantially financed, directly or indirectly, by government funds.

Judicial Clarification on “Substantial Funding”

• The Court clarified that substantial funding does not mean majority funding.
• Even partial but critical financial support that enables an NGO to perform its functions can bring it within the scope of the RTI Act.

Benefits of Bringing NGOs under the RTI Act

• Transparency and Accountability
  Expands public oversight and ensures responsible functioning of NGOs.
• Citizens’ Right to Information
  Since NGOs use public funds, citizens have a right to know how such funds are utilised, flowing from Article 21 of the Constitution.
• Improved Effectiveness of NGOs
  Many institutions such as hospitals and educational bodies fall under RTI as they operate on government-owned land or infrastructure, improving service delivery.

FCRA Amendment Act, 2020

Key Provisions and Implications

• Mandatory SBI Branch for Foreign Funds
  All foreign contributions must be received only in a designated State Bank of India (SBI), New Delhi branch.
  Implication: Enables close monitoring of foreign fund inflows.
• Ban on Re-transfer of Foreign Funds
  NGOs are prohibited from transferring FCRA funds to any other individual or organisation.
  Implication: Reflects concerns about fund diversion and intermediary misuse.
• Reduced Administrative Expense Cap
  Administrative expenditure limit reduced from 50% to 20% of foreign funds.
  Implication: Restricts operational flexibility, especially for smaller NGOs.
• Government Power to Freeze Accounts
  Government can suspend utilisation of foreign funds through “summary inquiry”.
  Implication: Increases discretionary power, potentially affecting NGO autonomy.
• Mandatory Identification of Office Bearers
  Office bearers must provide Aadhaar details (or passport details for foreigners).
  Implication: Creation of a centralised database to enhance tracking, surveillance, and accountability.

Concluding Insight

NGOs are indispensable partners in governance—enhancing outreach, innovation, accountability, and inclusion—but their effectiveness depends on a delicate balance between autonomy and regulation.