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NGOs vulnerable to terror funding, money laundering: MHA

By Vicky Nanjappa
March 20, 2014 12:59 IST
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The column marked ‘miscellaneous’ in statements of accounts of Non-Governmental Organisations who receive foreign funds is turning out to be a headache for the Indian authorities. Vicky Nanjappa tells you why

Agencies suspect that this money could be either used to launder money, finance terror or even to carry out religious conversions which is illegal in India.

A Union Home ministry report has expressed concern that several NGO’s in the country are vulnerable to terror financing and money laundering and it is time that there are self regulatory steps that are taken. The observation by the home ministry comes in its report which states that NGO’s have been getting over Rs 11,500 crore from foreign funding alone annually. 

An estimate would suggest that there are nearly 85,000 NGOs in the country, out of which 68,000 are registered with the Union government to collect foreign funds. The remaining 17,000 NGOs are the problem, according to government

Some have registered to receive only funds within India, while some work out of the ambit of the government. Several such NGOs have been mushrooming in Kerala, Uttar Pradesh, Bihar, Chhattisgarh and Jharkhand. NGOs come up mostly in trouble-hit areas or where there is a great influx of foreign money.

On paper, these NGOs show that they are working for a cause, but in reality are a front to receive money either for terror or laundering, Intelligence Bureau officials tell

The report by the home ministry states that NGOs are vulnerable to terror funds and money laundering. It is the policy of the government not to encourage soliciting of foreign contribution. As per the report, those NGOs authorised to receive foreign funds state the contribution has been towards rural development, child welfare, construction of schools, research and rehabilitation.

Although these figures are based on the returns filed by the NGOs, the worry is that there is not much specification on how this money has been spent. The balance sheet has a column called ‘miscellaneous’, where the expenditure is indicated, and this has raise alarm bells with the authorities.

As per the data available, the top five donors to NGO’s are the United States (Rs 3,400 crore), United Kingdom (Rs 1,220 crore), Germany (Rs 1,097 crore) and Italy and Netherlands with Rs 529 crore and Rs 419 crore respectively.

According to a source working with the financial wing of intelligence agencies and the National Investigation Agency, (who have been on the trail of these funds for a few years), “Many donations are genuine and we have found there is no problem with them. However, in some cases, we have found unaccounted-for money, which could mean that it is being used for laundering or funding terror. There have also been cases where funds have come in to facilitate conversions. While there are many illegal NGOs which receive such money, we have found in the case of some genuine NGOs where legal contributions are being used for religious purposes.”

“In a few cases they are marked as ‘miscellaneous’ and it is very hard to track them down. Moreover, we have found programmes of rural rehabilitation which have been carried out, and in many cases, people are induced to take goodies on the condition of conversion,” the source adds.

Conversions are illegal, and hence a punishable offence, so no funds can be generated for this purpose, the agencies further pointed out.

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