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ARC for monitoring big donations

November 04, 2008 17:42 IST

In the backdrop of reports of some terror groups and fundamentalist outfits getting money from abroad, a government panel today favoured amendments in the existing law to monitor big foreign contributions received by all organisations.

To make the Foreign Contribution (Regulation) Act, 1976, more stringent, the Second Administrative Reforms Commission said organisations getting over Rs 10 lakh (Rs 1 million) a year as foreign contribution must be put under the scanner.

Releasing the 231-page report at a press conference, ARC chairman M Veerappa Moily said organisations receiving an annual foreign contribution equivalent to less than Rs 10 lakh should be exempted from registration and other requirements.

They should be asked, instead, to file an annual return of the foreign contribution received by them and its utilisation at the end of the year, he said.

"The law may provide that they may be liable to be investigated, if there is a reasonable suspicion of suppression or misrepresentation of facts, and penal provisions of the law will be used against them in case violation is established," he said.

The commission in its report said it was 'aware that a large number of voluntary organisations are receiving donations from foreign sources and it is quite possible that at times the funds could be used for purposes which could adversely affect national interest'.

It said 99 organisations had received contributions above Rs 10 crore (Rs 100 million) in 2005-06 compared to 70 in 2004-05 and 57 in 2003-04. 

The report said the provisions of FCRA should aid at avoiding possible misuse of the law.

It said for proper scrutiny of returns filed by organisations, some of the functions under FCRA should be decentralised and delegated to state governments or district administrations.

The commission advocated a system of accreditation orcertification of voluntary organisations seeking government funds as well and said a law should be enacted to set-up an independent National Accreditation Council for the purpose.

The ARC also suggested  a new legal framework for societies, trusts, charitable institutions, wakfs and endowments.

It said the proposed law should provide for a new governance structure in the form of a three-member Charities Commission in each state. A Charities Tribunal too should be set up at the state-level.

 The report, titled 'Social Capital - A Shared Destiny', said corporate houses had a social responsibility to improve the quality of life of the local community.

Recognising the importance of people's participation in governance, it recommended better synergy between the government and the civil society institutions and said administrative approaches should be people-centric.

It said the role of the government in growth and development of the Self Help Group movement should be that of a facilitator and promoter.

The scope of micro-finance services should be widened to cover credit, savings, insurance, pension services and money transfer, it added.

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