Wednesday, July 2, 2014

The phenomenal growth Maharaja NGOs.



July 2, 2014


Prof Vaidyanathan

Professor of Finance, IIM, Bangalore.

  //A category of NGOs are registered with Ministry of Home Affairs -under Foreign contributions regulations Act [ FCRA] –These can be called Euro or Dollar NGOs  who get funds from private charities as well as Government organizations abroad.//

It is speculated that a big portion of this money goes to politicians and bureaucracy as a large number of institutes are owned, controlled and managed by politicians and business houses

India is a fascinating country. The number of stock exchanges we have, as per official records is 20, but the number of functioning exchanges is only two. The number of scrips listed on the Bombay Stock Exchanges [BSE] is nearly 9,000, only 3500 of these are traded at least once a year, and the top 50 securities constitute nearly two-third of the turnover. Actually only 250 to 300 are "active" traded scrips. Interestingly, the latest Handbook of Statistics on Indian Securities Market published by the Securities & Exchange Board of India (SEBI) has dropped the column for number of scrips listed on the BSE! It is one way to solve the issue of numbers.

In a similar fashion, we decided to probe the number of not-for-profit or non-governmental organisations (NGO) in India. Being in the teaching line, we have the habit of probing issues that are otherwise not to be probed at all! Let sleeping dogs lie is the national dictum in such matters.

NGOs are also known as Voluntary Organizations (VOs) or Voluntary Agencies (VAs) and more recently as Voluntary Development Organizations (VDOs), Non-Governmental Development Organizations (NGDOs) or Non-Profit Institutions (NPIs). There are equivalent names for NGOs available in different Indian languages. In Hindi NGOs are called Swayamsevi Sansthayen or Swayamsevi Sangathan.

Prior to the enactment of the Societies Registration Act of 1860, voluntary action was guided mainly by religious and cultural ethos. Subsequently, a series of legislations addressing the non-profit sector were promulgated. The starting point in this respect was Article 19 of the Indian Constitution which recognized a number of civic rights including the right "….to form associations or unions". It constitutes the legal basis of relevant legal provisions applicable to the non-profit sector. There are also non mandatory provisions that allow any group with the intention of starting a non-profit, voluntary or charitable work to organize itself into a legally registered entity. However, given the optional nature of these provisions, there is a large group of voluntary bodies that are not registered.

The United Nations Development Programme (UNDP) India and the UN Volunteers (UNV) programme had organized a Forum in January 2006 at UNDP's Delhi office to discuss the issues relating to implementation of the UN Handbook on Non-profit Institutions (NPIs) in the System of National Accounts in India.

  The meeting was attended by representatives of the Planning Commission, Ministry of Statistics and Programme Implementation (MoSPI), NGOs, UNV Headquarters, and the Centre for Civil Society Studies of Johns Hopkins University, which is leading the effort to implement the UN NPI Handbook throughout the World.

  At this Forum, the UN Resident Coordinator and UNDP India Resident Representative stressed the need to implement the UN Handbook in order to capture the contribution of NPIs to the national economy. It was mentioned that the voluntary sector played a significant role in the economic and social change of the country and contributed significantly to the development in both rural and urban areas. The Forum therefore urged that India should take suitable steps to implement the UN Handbook on NPIs and compile accounts of NPIs functioning in the country.

The National Policy on the Voluntary Sector, adopted in May 2007, presumably under the guidance of the National Advisory Council, pledges to encourage, enable and empower an independent, creative and effective voluntary sector, with diversity in form and function, so that it can contribute to the social, cultural and economic advancement of the people of India. It constitutes the beginning of a process to evolve a new working relationship between the government and the voluntary sector, without affecting the autonomy and identity of voluntary organizations (GoI/Planning Commission, 2007). Accordingly, it is expected that the enabling environment will be further enhanced to encourage the development and active engagement of the non-profit sector, including volunteerism, in the community's affairs and developmental efforts.

So we can conclude that at the beginning of the United Progressive Alliance (UPA)'s second term, the so called voluntary or NGO sector was fully ensconced in decision making and fund collecting activities.

Read the rest of the article in Prof Vaidyanathan's blog here :-


Related articles:-

Christian money that is sent to invade the Hindu space.

Foreign funding of the NGOs – a threat to growth and national security.

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