NGOs lose permit but find a new way to move money into India

New Delhi, Aug 30: Several NGOs have come under the scanner for violating the Foreign Contribution Regulation Act. The Union Home Ministry has cancelled the permits of 10,000 out of the 34,000 NGOs registered. However, now the Home Ministry has written to the Finance Ministry asking it stop registering NGOs under the Foreign Exchange Management Act or FEMA.

FEMA according to the home ministry is being used by several NGOs which were found to be violating the FCRA. The Home Ministry has noticed that several NGOs abroad are registered under FEMA. They use this provision and disburse funds into their liaison offices in India. This is in violation of FCRA, the Home Ministry says.

Home Ministry officials tell OneIndia that FEMA is regulated by the Finance Ministry. This is causing a problem to keep tabs and also act against NGOs which are registered under FEMA. The home ministry will now write to the Finance Ministry to give up its powers to monitor the NGOs that are registered under FEMA.

The Home Ministry says that since it is the finance ministry which monitors NGOs registered under FEMA, taking action becomes tough. Let FCRA be the only legislation for registration of NGOs so that there is more accountability and the violations can be flagged, the Home Ministry will state in its letter to the finance ministry.

Intelligence Bureau officials say that they noticed in the past couple of months that several NGOs had started using FEMA to move money into their liaison offices in India. This was being done by at least 67 NGOs which had lost its FCRA licenses, the IB also noted.

OneIndia News