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What happened to the Rs 94K cr that Indian NGOs received over 17 years?

Last updated on: February 29, 2012 15:22 IST

What happened to the Rs 94K cr that Indian NGOs received over 17 years?

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Sanjeev Nayyar
It is time the government woke up to the risks that uncontrolled foreign monies flowing to Indian NGOs pose to India's economic progress, social cohesion and national integrity.


PM wakes up to dollar driven NGO threat, screamed a newspaper headline. The government has cancelled licenses of three such organisations for diversion of funds to fuel anti-nuclear protests in India.

This decision has once again put the spotlight on foreign funding of NGOs. A close perusal of the FCRA Report published by the home ministry reveals billions of dollars received by NGOs in India.

Before analysing the latest FCRA report a bit about the regulatory framework for NGOs to receive foreign money.

The Foreign Contribution Regulation Act was passed in 1976. It was repealed and FCRA 2010 was passed along with the Foreign Contribution Regulation Rules 2011. Both became effective from May 1 2011.

They seek to regulate the receipt of funds by NGOs. The FCRA is managed by the Ministry of Home Affairs (MHA).

Any organisation that wants to receive contributions from abroad has to apply and get approval from the home ministry. All remittances are received into a single bank account of a scheduled bank or through such branches as may be specified.

If an NGO, whether registered or not, receives a contribution in excess of Rs 1 cr (rs 10 million) during a period of 30 days, the bank has to report this to the central government within 30 days of the date of such last transaction.

The NGO has to annually submit audited receipts, payments account, balance sheet etc to the ministry. The MHA scrutinises the returns to ensure that contributions received for a particular purpose are used for that purpose only. It does a detailed check of randomly picked associations and collates the data received to present the FCRA Annual Report [uploaded on http://mha.nic.in/fcra.htm].

The associations could be religious, social, educational, cultural or educational organisations. MHA wants to ensure that foreign contributions are utilized for bona fide activities and do not compromise national security.

The FCRA report for the year ended 31st March 2010 was published on 11th January 2012 i.e. 21 months after year end.

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Photographs: Reuters

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What happened to the Rs 94K cr that Indian NGOs received over 17 years?

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Trends in foreign contributions

Indian NGOs received a staggering Rs 94,520 cr (Rs 945.20 billion) from 1993-94 to 2009-10.

As on 31.3.2010, there were 38,436 registered associations, up 5.5 per cent from the previous year, 27 per cent when compared to 2004-05 and 68 per cent as compared to 2000-01. Clearly the number of registered NGOs that receive dollars has seen a huge surge in the last decade.

Year

Registered Associations (as on 31st March of F.Y.)

Associations that gave details of remittances received

Amounts received Rs crs

1993-94

15,039

Not Available

1865

2000-01

22,924

64%

4535

2003-04

28,351

61%

5105

2004-05

30,321

61%

6257

2005-06

32,144

58%

7878

2006-07

33,937

56%

11,336

2007-08

34,803

54%

9,663

2008-09

36,414

55%

10,803

2009-10

38,436

56%

10,338

Total 1993-94 to 2009-10

94,520

$ Billion

18.90

All numbers in this article are reproduced from FCRA reports published by the MHA. Assumed an exchange rate of Rs 50 to a dollar and all figures rounded off to the nearest crore in article.

In 2009-10, 7,275 of the 21,508 associations who submitted their accounts did not receive any foreign contributions. This means that only 46 per cent of the associations who received foreign contributions filed their annual returns with MHA. Hence, the actual amount of contributions received by NGOs would be much higher than Rs 10,338 cr (Rs 103.38 billion) reported above.

Is such unreported contribution being used for money laundering, terrorist activities or funding protests as mentioned by Prime Minister Singh?

During the year, 21,000 defaulter associations which had not submitted returns for the years 2006-07, 2007-08, 2008-09 were issued Show Cause Notices. We are already in the first quarter of 2012.

By the time these NGOs reply to the notices and the government decides what action to take against them, the NGOs might receive many more crore with zero accountability to the government.

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Photographs: Reuters
Tags: MHA , FCRA , Singh

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What happened to the Rs 94K cr that Indian NGOs received over 17 years?

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Largest donors country wise (in Rs cr)
                                                                             

Year

USA

Germany

UK

Italy others

2002-03

1680

715

685

NA

2003-04

1584

757

676

350

2004-05

1927

931

764

353#

2005-06

2426

1181

1062

500

2006-07

2949

1033

1428

606&

2007-08

2928

971

1269

515

2008-09

3433

1103

1131

547

2009-10

3106

1046

1039

583

Total

20,033

7,737

8,054

3,454

$ Billion

4.0

1.55

1.61

Italy, #Netherlands, & Switzerland.

The top three donor countries for many years have been USA, Germany, and UK. Remittances from the U.S. between 2002-03 and 2009-10 have nearly doubled. Despite the economic downturn, the West has continued contributions to Indian NGOs? Why?

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Photographs: Reuters

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What happened to the Rs 94K cr that Indian NGOs received over 17 years?

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Key Donors: Country wise Trends (in Rs cr)

Country

2009-10

  Country

2008-9

Country

2007-8

USA

3106

USA

3433

USA

2928

Germany

1046

UK

1131

UK

1269

UK

1039

Germany

1103

Germany

971

Italy

583

Italy

547

Italy

515

Netherlands

509

Netherlands

513

Netherlands

414

Spain

437

Spain

437

Spain

401

Switzerland

302

Switzerland

370

Switzerland

364

Canada

298

Canada

303

Canada

276

France

189

France

193

France

196

Australia

148

Australia

131

Australia

138

UAE

133

Belgium

124

Belgium

100

Belgium

122

Austria

106

Austria

99

Austria

112

Sweden

103

Sweden

89

Sweden

106

UAE

146

UAE

79

Mauritius

101

Ireland

69

Ireland

77

Should a country that aspires to be a superpower continue to receive billions of dollars as charity every year? Spain and Italy are in dire economic straits, Britain had a fiscal deficit of 11% of GDP in 2009-10 yet they remitted over Rs 1000 crs to Indian NGOs per annum.

Significantly, barring the UAE, all countries listed above belong to the West. Media reports indicate that some countries in the Middle East, notably Saudi Arabia, made large remittances to India, but these contributions are not listed officially. They are either not coming, or are coming through the hawala route.

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Photographs: Reuters

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What happened to the Rs 94K cr that Indian NGOs received over 17 years?

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Largest donors: Agency wise trends (in Rs cr)

Donor Name & Country

2009-10

Donor Name & Country  

2008-09

Gospel For Asia Inc USA

233

World Vision  International USA

706

Fundacion Vicente Ferrer, Barcelona, Spain

229

Gospel For Asia Inc USA

596

World Vision Global Centre, USA

198

Fundacion Vicente Ferrer, Barcelona, Spain

458

Compassion International, USA

132

Shyam Shyam Dham Samiti India

359

HCL Holdings Pvt Ltd, Mauritius

94

Compassion International, USA

347

Om Foundaiton, USA

64

Fundacion Vicente Ferrer, Spain

241

Population Service International, USA

51

Action Aid International, UK

228

Oxfam GB, UK

45

BAPS, Inc USA

199

Save The Children, UK

44

Christian Children Fund, USA

197

EED-Evangeischer Entwickkugddienst e.v., Germany

44

Plan International, USA

191

University of Manitoba, Canada

41

Om Foundation, USA

188

Bill & Melnda Gates Foundation, USA

40

Ahmadiyya Muslim Association, UK

178

Plan International, USA

39

Mata Amritanandmai Centre, USA

176

SOS Kinderdorf International, Austria

34

The Global Fund to Fight aids, Tuberculosis, Malaria Switzerland

166

Wort and Tat Allgemeinel Mission, Geselischaft, Germany

29

Oxfam India Trust, UK

163

 From Top 15 donors

1317

 

4393

Total Receipts in year

10338

10803

Contribution of top 15 donors as a per cent of total contributions was 13 per cent in 2009-10 and 40 per cent in 2008-09.

Big donors of 2008-09 like World Vision International USA and Gospel for Asia Inc USA, Fundacion VF Barcelona have reduced contributions very substantially.

Thus, World Vision International USA contribution dropped from Rs 706 crore (Rs 7.06 billion) to Rs 198 crore (Rs 1.98 billion) ; Gospel for Asia dropped from Rs 596 crore (Rs 5.96 billion) to Rs 233 crore (Rs 2.33 billion).

Yet, total contributions received into India from the US in the two years referred to above is about the same, so the probability of routing money through other organizations seems a distinct possibility and needs to be investigated.

Largest donors were Gospel for Asia Inc USA Rs 233 crore (Rs 2.33 billion), Fundacion Vicente Ferrer, Barcelona, Spain Rs 229  crore (Rs 2.29 billion), World Vision Global Centre, USA 198 crore (Rs 1.98 billion), Compassion International USA Rs 132 crore (Rs 1.32 billion).

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Photographs: Reuters
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What happened to the Rs 94K cr that Indian NGOs received over 17 years?

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Top 15 Recipient Associations 2009-10 (in Rs cr)

Association

2009-10

Association

2008-09

World Vision of India, Tamil Nadu

209

World Vision of India, Tamil Nadu

192

Rural Development Trust, A.P.

151

Rural Development Trust, A.P.

155

Shri Sevassubramania Nadar Educational Charitable Trust, Tamil Nadu

94

Believers Church India, Kerala

100

Believers Church India, Kerala

88

Action Aid, Karnataka

77

Caruna Bal Vikas, Tamil Nadu

83

Shyama Shyam Dham Delhi

109

Women's Development Trust, Andhra Pradesh

80

Women Development Trust, A.P.

82

Sri Sri Jagadguru Shankaracharya, Karnataka

71

Plan International Inc, Delhi

66

Action Aid, Karnataka

66

Church Auxiliary for Social Action, Delhi

61

Bal Raksha Bharat, Delhi

66

Sri Sri Jagadguru Shankaracharya, Karnataka

60

SOS Children's Village of India, Delhi

62

Mata Amritanandmayi Math, Kerala

116

Love India Ministries, Kerala

62

Caruna Bal Vikas, Tamil Nadu

74

Oxfam Trust, Delhi

59

Boachasanwasi Akshar Purushottam Swaminarayan Sanstha, Gujarat

78

Plan International Inc, Delhi

55

Christian Children Fund Inc, Karnataka

62

Tibetan Children's village, Himachal Pradesh

53

Pratham Mumbai Education Initiative Maharashtra

67

Missionaries of Charity, West Bengal

53

SOS Children's Village of India, Delhi

83

Top 15 recipients received

1395

Top 15 recipients received

1382

Total Contributions received

10338

Total Contributions received

10803

Under Section 14 of FCRA, the book of accounts and records of 12 associations out of 38,436 were inspected by officials of the MHA. This is highly inadequate and is a reflection of the importance Government attaches to monitoring how foreign contributions are utilised.

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Photographs: Reuters

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What happened to the Rs 94K cr that Indian NGOs received over 17 years?

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Trends of state wise receipt of foreign contributions (in Rs cr)

State

2009-10

%UP

2005-6

2002-3

1.Tamil Nadu

1663

-

1609

775

2. Delhi

1816

(8)

1556

881

3. Andhra Pradesh

1325

7

1012

630

4. Maharashtra

921

-

664

505

5. Karnataka

983

(3)

621

489

6. Kerala

892

(10)

656

409

7. Jharkand

160

-

97

58

8. West Bengal

559

(6)

355

272

9. Gujarat

394

(15)

301

272

10. UP

218

-

103

NA

11. Orissa

214

(6)

129

NA

12. MP

143

(10)

77

NA

13. Bihar

139

(16)

101

NA

14. Rajasthan

128

(7)

-

NA

15. Himachal P

145

12

83

NA

16. Assam

93

-

NA

17. Punjab

87

82

NA

18. Others

458

432

756

      Total

10338

(4)

7,878

5,047

% increase between 2008-9 and 2009-10.

Most of the reported inflows are concentrated in the four southern states, Delhi and Maharashtra. Why?

Since 2005-06, Tamil Nadu has consistently received foreign contributions of more than Rs 1600 crore (Rs 16 billion) p.a., peaking at Rs 2,118 crore (Rs 21.18 billion) in 2006 07.

Kerala received a minimum of Rs 800 crore (Rs 8 billion) p.a. since 2006-07, peaking at Rs 991 crore (Rs 9.91 billion) in 2008-09.

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Photographs: Reuters

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What happened to the Rs 94K cr that Indian NGOs received over 17 years?

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Top recipient districts of foreign contributions (in Rs cr)

District

2009-10

2007-8

2002-3

Chennai

872

731

363

Mumbai

607

470

284

Ranchi

-

NA

Bengaluru

702

670

358

Kolkatta

341

352

NA

Uttara Kanada

-

-

NA

Hyderabad/Sec

334

291

181

Ananthpur

414

278

169

Quilon

324

250

-

Ahmedabad

219

207

NA

Tirunelveli

-

-

NA

Madurai

177

187

NA

Quillon

-

-

NA

Ernakulam

226

207

NA

Pune

186

173

NA

Krishna

158

134

NA

Tiruchirapali

-

96

NA

Kancheepuram

112

122

NA

Trivandrum

-

NA

KangraDharamsala

145

104

NA

Kottayam

106

NA

NA

Among the districts, the largest recipients of contributions were Chennai Rs 872 crore (Rs 8.72 billion), Bengaluru Rs 702 crore (Rs 7.02 billion), Mumbai Rs 606 crore (Rs 6.06 billion), Ananthapur Rs 414 cr (Rs 4.14 billion), Kolkatta Rs 341 crore (Rs 3.41 billion), Hyderabad/Secunderbad Rs 334 crore (Rs 3.34 billion), and Quilon Rs 323 crore (Rs 3.23 billion).

These are huge sums of money that require continuous and serious monitoring to ensure that end utilization matches the purported purposes for which the monies were received.

Tamil Nadu and Chennai district have been amongst the largest recipient of foreign money for many years now. This was known to the Government all along. So why has the PMO woken up to the perils of foreign money now?

Because foreign money has been used to delay commissioning the Koodankulam nuclear power plant? As we have seen in the past, any policy matter that has the words 'nuclear', such as nuclear power or Indo US Nuclear deal, makes the Prime Minister unnaturally assertive and stubborn, notwithstanding threats from UPA allies.

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Photographs: Reuters
Tags: PMO , UPA , Chennai , Indo US

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What happened to the Rs 94K cr that Indian NGOs received over 17 years?

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Some information about donor organisations

Mission of World Vision International USA - "WV is an international partnership of Christians whose mission is to follow our Lord and Saviour Jesus Christ in working with the poor and oppressed to promote human transformation, seek justice and bear witness to the good news of the Kingdom of God."

"In Sri Lanka the activities of WV raised a strong alarm. Lt Col A.S. Amarasekara of Sri Lanka wrote: "After George Bush Jr became the President of the US, he made a speech in which he said that he would no longer support developing countries through their respective governments but would channel American aid through the American Christian Relief Organizations in these countries. WV is one such organisation".

WV is very careful to keep its proselytising disguised. Excerpts from a Tehelka report "In, Mayurbhanj, again in Orissa, WV regularly organises spiritual development programs as part of its ADP package. WV supports local churches by organizing leadership courses for pastors and church leaders. WV India is active in Bhil areas and openly admits its evangelical intentions".

Gospel for Asia is a Texas based Christian missionary organisation. According to its site it is involved in child education, ministering lepers, natural disaster relief and literature distribution for character development and further understanding of Jesus Christ.

"In 2008, the Kerala home minister revealed that GFA had received Rs 1,044 crore (Rs 10.44 billion) in foreign donations in the last fifteen years. He added that the church has bought nearly 2,800 acres of land, including a 2200 acre rubber estate". Quoted from Breaking India by Rajiv Malhotra and Aravindan Neelakandan.

The website of Compassion International USA reads "Compassion believes that God's purposes on earth are accomplished through the Church - including His purpose of bringing justice and mercy to the world's poor and oppressed. That's why our program is carried out exclusively through indigenous, evangelical bodies of believers".

There are, however, organisations that receive foreign funds and doing excellent work.

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Photographs: Reuters

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What happened to the Rs 94K cr that Indian NGOs received over 17 years?

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Utilisation of foreign contributions (in Rs cr)                                                                         

Expenditure Head

2009-10

2008-09

1.      Establishment expenses

1483

5022

2.      Rural Development

944

2835

3.      Relief/rehabilitation of natural calamities

267

1345

4.      Welfare activities for children

743

2304

5.      Construction/maintenance of schools/colleges

631

2031

A comparison of FCRA reports for 2009-10 and 2008-09 show that classification of expenses does not appear to be consistent.

For e.g. establishment expenses for 2008-09 as shown in the current year's report is Rs 1,330 crore (Rs 13.3 billion), while in the previous year's report as reflected above is Rs 5,022 crore (Rs 50.22 billion).

MHA acknowledges that it merely compiles the returns received by it into an annual report. Therefore, expenditure-wise heading stated above is neither properly audited nor scrutinised.

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Photographs: Reuters
Tags: FCRA , MHA

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What happened to the Rs 94K cr that Indian NGOs received over 17 years?

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Some ideas

The FCRA report states that the FCRA desk in the MHA is manned by a Deputy Secretary (foreign contribution) with four sections. Given the importance of monitoring foreign contributions and their impact on national security, the team needs to be strengthened.

Some former officials suggest the team should consist of an Additional Secretary FCRA, two Joint Secretaries, and two Deputy Secretaries with adequate number of under secretaries.

MHA needs to move away from being a centralized letter box, doing approvals and collating NGO accounts, and focus on field visits and audits instead.

MHA sponsored annual audits for all associations who receive annual contributions of over Rs 10 crore (Rs 100 million).

NGOs receiving Rs 5-10 crore (Rs 50 - 100 million) should be audited once in two years and those getting Rs 1-5 crore (Rs 10 - 50 million) once in three years.

The Reserve Bank of India has empanelled auditors for bank audits; MHA can empanel reputed auditors for NGOs to report whether money was spent on areas for which MHA approval was taken.

The deeper intent behind the Western world remitting thousands of crores into India annually needs to be probed and checked.

Weakening the Hawala network through continuous monitoring, arrests and convictions.

It is time the government woke up to the risks that uncontrolled foreign monies flowing to Indian NGOs pose to India's economic progress, social cohesion and national integrity.


The author is a Chartered Accountant and founder of esamskriti.com

Photographs: Reuters

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