NGOs: How the new rules will check foreign funding?

All NGOs will have to submit details of their foreign funding within 48 hours of receiving them says a note from the Prime Minister's Office. There is a proposal to amend the Foreign Contribution Regulation Act which makes the entire foreign funding process to NGOs in India more transparent.

Several NGOs in India have come under the scanner following an explosive Intelligence Bureau report on how they were hurting the country's economy.

Making funding for NGOs more transparent:

The Prime Minister's Office has instructed the Home Ministry to put in place a set of rules to ensure that the NGOs receiving foreign funds are monitored. The Home Ministry is currently working on the recommendations and the same could be in place by the end of this month, sources say.

Once the new rules come into force, NGOs would have to declare within 48 hours the foreign funds they receive. Once the funds come in from a foreign country, the new rules would mandate that the same is declared within 48 hours or two days, the new rules state.

In addition to this the NGOs would also have to declare on their respective websites all details of the funds they get from abroad. Detailed information relating to the funding received by the NGOs would have to mandatorily put up on the websites of the NGOs the proposed rules also state.

Inform government about spending:

The new rules also state that the NGOs would have to declare the nature of spending as well. Not just the flow of the funds, the intent behind spending the same would also need to be declared both to the government and also on their websites, as per the new rules.

Further the rules also mandate that the funding of the previous years will also need to be put up on the website. The inflow of the previous years funds and how the same was spent will also have to be declared, the proposed rules state.

Failure to provide details will lead to action:

Once the new rules come into force, any NGO which fails to declare the flow of the funds or how the same was spent will be liable for action. According to the new rules there would be strict action taken if the NGOs fail to adhere to the new rules.

Not just action, but such NGOs will also be subject to frequent checks and auditing by the government officials, the rules also state.

Further the government will also ensure that there is a link between the Ministry of Home Affairs, the Reserve Bank of India and the banks of the NGO. This would help the government effectively monitor the flow of funds into the accounts of NGOs which are receiving foreign funds.