The Supreme Court today asked the Centre to examine enacting a law to regulate government funds for NGOs and prosecute them in case of misuse, misappropriation of funds or non-filing of annual statements.
A bench headed by Chief Justice J S Khehar also expressed unhappiness over the propose guidelines to keep a tab on the nearly 30 lakh NGOs saying “it may not meet the enormity of the situation”, that is problems faced due to the non-accountability of the funds given to the NGOs since decades.
“We get to know that Rs 950 crore is being given in total to all NGOs every year. This is a phenomenal amount..tax payers money. since 78 ministries and departments were granting money to NGOs, a law on regulating funds and work by NGOs would be much better. Inform us in eight weeks whether you want to streamline NGOs through guidelines or through legislation”, the bench told the government.
On April 5 Centre had submitted to the Supreme Court fresh draft guidelines for accreditation of NGOs and Voluntary Organisations.
On direction from the bench of Chief Justice J S Khehar and Justice D Y Chandrachud, Additional Solicitor General Tushar Mehta who submitted the draft guidelines had handed over a copy to Amicus curiae Rakesh Dwivedi for including his suggestions and inputs.
The PIL filed by advocate M L Sharma for keeping a tab on the functioning of the NGOs has now been fixed for final hearing after four weeks.
The draft guidelines sasd existing portal at NITI Ayog, NGO-Darpan will be the nodal agency for the purpose of registration and accreditation of NGOs and Voluntary organizations seeking funds from government of India
It said NITI Ayog will maintain a database and effective system to manage and disseminate information related to the NGOs and voluntary organizations. Financial statements should be audited annually as per the General Financial Rules, 2017
A show cause notice is to be issued to the NGO with a direction to take corrective action immediately in case of non-submission of utilization certificate or where the ministry/department suspects a material irregularity, or misutilisation misappropriation or falsification. In case of continued non-compliance, the NGO or voluntary organization will be blacklisted, it said.
Questioning the transparency in their functioning, the Supreme Court had in January ordered compulsory audit by March 31, 2017 of nearly 30 lakh NGOs, most of them who receive funds worth crores of rupees from the government and abroad.
Passing detailed orders on a Public Interest Litigation filed by Advocate M L Sharma in 2011 seeking a tab on functioning of NGOs, a bench headed by Chief Justice J S Khehar had said mere blacklisting of NGOs who do not file annual statements will not suffice but also action must be inititated like criminal proceedings for missappropriation and civil action for recovery of given funds.
Sharma had argued that NGOs are given crores worth funds but government had no mechanism as to monitor what they did with it.
The SC order came after Amucus Dwivedi cited a CBI report that only 10 per cent of NGOs filed annual income and expenditure statements.
Raising the issue of transparency regarding their functioning, the CBI report filed in the court said that out of 22,39,971 NGOs in 20 states (information from nine states is awaited), only 2,23,428 have filed their balance sheet, a paltry ten per cent.