A voice in the wilderness
THE Rural Development Trust (RDT) , an Andhra Pradesh-based agency, buys a minor asset, a mobike, but forgets to fill up a form and inform the Union ministry of home affairs. Its registration under the Foreign Contributions Regulation Act (FCRA) is promptly cancelled.
It was Voluntary Action Network India (VANI), a Delhi-based national level network of ngos which came to RDT's assistance. VANI, started in 1988, provided legal assistance and lobbied behind-the-scenes to set matters right.
For voluntary organisations working at grassroots levels, life is often fraught with this sort of unanticipated danger and tension. As a network of hundreds of NGOs, vani helps NGOs get in touch with each other and acts as a proxy voice for them. It dialogues with policymakers to get irksome rules and red tapism in the garb of laws, acts and procedures amended.
Three acts are of key concern to voluntary organisations: the Societies Registration Act (SRA), the FCRA, and the Income Tax Act. "These are outdated rules and need to be changed so that NGOs can carry on development activities unhindered," says Anil K Singh, VANI's executive secretary. He observes, "The SRA is applicable to religious institutions, hospitals and charitable trusts. Voluntary organisations are made to register under this act, and the same rules apply to them. Sponsors have to produce affidavits that the voluntary organisation's name is not already in use. Authorities take their own sweet time to investigate this."
Registering authorities can go on asking for unlimited information from voluntary organisations, interfere in their internal disputes and even cancel their registration. Says Singh, "Civil courts exist to solve disputes. And the registering authority can ask for only relevant information."
Then, audited accounts must be presented. This is difficult for small organisations. Says Singh, "Our work deals with development and not charity. Voluntary organisations need registration under a new act which would be confined to development-oriented institutions. They should ensure that they broadbase their management, and that there is public accountability."
To accept foreign contributions, voluntary organisations have to apply for registration with the home affairs ministry. Registration forms are virtually incomprehensible, and the government can take upto 3 years to deal with applications.
Many applications are turned down if they do not have the required 3 years' experience. If any organisation does not receive funds for a particular year, it still has to fill in a "nil" report. The FCRA administration also stipulates that voluntary organisations cannot transact foreign contributions in different bank accounts. But many agencies work in areas far from their head office. Field programmers sometimes require funds at short notice, and carrying cash in large amounts may be risky. Salaries paid to employees are questioned, too.
"The Central government should dispose of applications for registration under FCRA within a period of 150 days," says Singh. The government could do best by streamlining rules: accounts regarding foreign contribution could be presented along with income tax returns to prevent double auditing; control should be transferred from the home affairs to the finance ministry, since funding agencies have to anyway seek approval from the finance ministry.
Funds received by voluntary organisations cannot be categorised under income tax. At the end of a financial year, agencies are sometimes left with some surplus money, which is not a commercial profit. Says Singh, "Voluntary organisations are not commercial organisations. We should be given tax benefits on the pattern of educational and charitable institutions."