SCALE OF THE GRANTS AT LEAST RS. 9500 MILLIONS PER YEAR

Embargoed for: 25 January 2013

Dear Sir/Madam,

Asian Centre for Human Rights (ACHR) has the pleasure to share its report
“India’s Funds to NGOs Squandered”, the first ever study on conducted on
funding to NGOs by the Government of India. It is available at:

http://www.achrweb.org/reports/india/India’s_Fund_to_NGOs_2013.pdf

This report was released at a panel discussion in New Delhi on 18 January
2013. The panel discussion was addressed by Mr Satyabrata Pal, Honourable
Member, National Human Rights Commission of India; H.E. Ms. Lise Grande,
UN Resident Coordinator & UNDP Resident Representative to India; Mr
Laurent Le Danois, Attaché – Development Cooperation, Delegation of
European Union to India; Mr Amitabh Behar, Executive Director, National
Foundation of India; and Mr Suhas Chakma, Director of Asian Centre for
Human Rights.

Please find below the brief of the study:

I. SCALE OF THE GRANTS: AT LEAST RS. 9500 MILLIONS PER YEAR

ACHR has been conducting the study for the last three years. As per the
replies received under the Right to Information Act, India’s Central
Government Ministries and the State Governments provided at least Rs.
6654,35,87,684 as grants to NGOs/VOs during FYs 2002-2003 to 2008-2009 or
an average of Rs. 950,62,26,812 every year. This includes Rs.
4756,71,26,395 given by the Central Government and Rs. 1,897,64,61,289 by
the State Governments.

The figure of Rs. 6654.36 crores of funds given to NGOs is only indicative
and not accurate. First, a number of States and Union Territories such as
Madhya Pradesh, Uttar Pradesh, Orissa, Jammu and Kashmir, Arunachal
Pradesh, Mizoram, Dadra and Nagar Haveli, Daman and Diu and Lakswadeep
failed to provide information about the grants given to NGOs. Second, many
departments of the State Governments and Union Territories (UTs) which
replied did not provide full information. Third, the Central government
Ministries provided much less figures under the RTI applications in
comparison to information placed before the Parliament (both Lok Sabha and
Rajya Sabha). Fourth, little information was made available with respect
to many flagship programmes including the Mahatma Gandhi National Rural
Employment Guarantee Act. Fifth, many of the government owned Public
Sector Undertakings did not provide information about the funds given to
the NGOs as part of the Corporate Social Responsibility and therefore, not
included in this study.

II. FOR MINISTRY OF ENVIRONMENT AND FOREST, MONEY GROWS ON TREES

The selection procedure for the grantees lacks transparency. All the
Ministries claim that applications are selected on the basis of merit. But
how that merit is determined is unclear. In reality, merit matters little.
There is a mandatory requirement of recommendations from the State
Governments which facilitates corruption. In overwhelming majority of the
cases only those voluntary organizations which are close to the government
officials or those who have control over the officials/NGOs i.e. political
leaders are selected.

Field studies by ACHR suggest that selection of grantees is often
determined not on ability or technical expertise but rather on the
applicant’s ability to pay a bribe. The NGOs interviewed by the ACHR
alleged that to have their application approved required bribes amounting
to 15% to 30% of the grant. If a conservative estimate of 15% is used as a
“bribe to process the applications”, during the Fiscal Years 2002-2003 to
2008-2009 at least Rs. 1000 crores have been spent on bribes paid to
different layers of officials for approval of the projects.

These estimated Rs 1,000 crore bribes must be seen in the context of the
Comptroller and Auditor General’s (CAG) Report No.17 of 2010-2011
pertaining to audit of transactions and performance in the Ministry of
Environment and Forest in which the CAG concluded that 7,916 Utilisation
certificates (UCs) from the grantees for grants worth Rs 596.79 crores
from 1981-2009 were not obtained under the scheme of Grants-in-Aid to
Voluntary Agencies. The CAG concluded that the possibility of
misutilisation/fraud is not ruled out as majority of VAs/State Forest
Departments /Forest Development Associations neither came back to the
National Afforestation and Eco-Development Board (NAEB) for the next
installment after release of first installment nor did they furnish
UCs/progress reports.

III. NO ACCOUNTABILITY BEYOND BLACKLISTING

There is little accountability beyond blacklisting.

The CAPART under the Ministry of Rural Development sanctioned 24,760
projects during 1 September 1986 to 28 February 2007 involving a total
sanctioned grant of Rs 252,02,44,12.56. Out of these, 511 NGOs were placed
under the blacklist category due to irregularities committed. However, out
of 511 blacklisted agencies/NGOs only 10 cases were referred to the
Central Bureau of Investigation (CBI) for investigation while the First
Information Reports (FIRs) were lodged against only 101 NGOs. By 3 August
2009, the number of NGOs blacklisted by the CAPART increased to 830 and
FIRs were lodged against 129 blacklisted NGOs. By 3 May 2012, another 81
NGOs were placed under Black List category and 195 NGOs were placed under
Further Assistance Stopped (FAS) category by the CAPART.

The problem with blacklisting is reflected from the fact that CAPART even
released Rs. 46,83,142 to five blacklisted NGOs namely Nirmala Weaker
Section (Andhra Pradesh), Sarvodaya Ashram (Bihar), Magadh Social
Development Society (Bihar), Pazhakulam Social Service Society (Kerala)
and Vijay Warangal Trust (Maharashtra) in 2009.

Though 7,916 Utilisation Certificates from the grantees for grants worth
Rs 596.79 crores have not been received by the MoEF, the National
Afforestation and Eco-Development Board under the MoEF had filed only
seven FIRs and only one voluntary organization from Orissa had returned
the money in November 2009.

The Ministry of Women and Child Development alone blacklisted 389 NGOs and
further assistance to these organizations from the Rashtriya Mahila Kosh
(RMK) scheme has been stopped. Three organizations viz. the Central Social
Welfare Board (CSWB), an autonomous organization, and Indian Council of
Child Welfare (ICCW) and Bharatiya Adim Jati Sewak Sangh (BAJSS) acting as
‘mother’ outfits for the Rajiv Gandhi National Creche Scheme were
allocated a sum of Rs 110 crores annually since 2006. There were reports
of irregularities and pursuant to an application under the Right to
Information Act, 2005 filed by the ACHR the Ministry of Women and Child
Development confirmed that the Ministry had ordered an investigation and
requested the Institute of Chartered Accountants of India (ICAI) to check
the authenticity of the Chartered Accountants engaged by these three
organizations. In an RTI reply dated 7 July 2010 the Ministry informed
ACHR that the M/s Pawan Kumar Garg & Co., engaged by the Bharatiya Adim
Jati Sevak Sangh is not a registered firm of Chartered Accountants as per
ICAI records. In a communication dated 7 May 2010 under the RTI Act, 2005
the CSWB informed the ACHR that no investigation has been going on against
the CSWB indicating that no inquiry was launched against the officials
responsible.

The only case that came to light during the study in which limited action
was taken was with respect to six officers of CAPART identified as
Surendra Singh (Director), S. D. Singh (Assistant Director), Y. Bhakta
(Research Officer), A. R. R. Pillai (Research Officer), M. P. Singh
(Research Officer) and S. K. Das (Research Officer) and they were awarded
reduction of pay and increment.

IV. FUNDS INCREASING: NEED FOR A NATIONAL GRANTS-IN-AID COMMISSION
The grants to the NGOs given by the Government of India have been
increasing and as per the RTI responses, the amount increased from Rs 561
crores in 2002-2003 to Rs 835 crores in 2008-2009.

As India involves the NGOs/ VOs in the implementation of its programmes
more than ever, India must realize that funding to voluntary sector is not
something that can any longer be done as part time job of the government
officials, many of whom are the ultimate and illegal beneficiaries of the
funds granted to the voluntary sector.

In order to address the malaise, Asian Centre for Human Rights recommended
to the Government of India to establish a “National Grants-in-Aid
Commission” through which all grants to the voluntary sector by all the
Ministries shall be routed and the “National Grants-in-Aid Commission” be
responsible for all aspects, inter alia, calls for proposals, selection of
proposals, monitoring of implementation, review of reports, recovery of
funds etc. In the interim period, ACHR has requested the Government of
India to direct (i) all the Ministries to do away with current process of
recommendations by the District Magistrates and the State Governments,
invite applications through open call for proposals, consider the
applications on merits by independent evaluators, and conduct necessary
verification only after short-listing of the applicants; and (ii) direct
all the Central Ministries, the State Governments and Union Territories to
make all information pertaining to the grants to voluntary sector
including recommendations of the State governments publicly available as
part of the voluntary disclosure under the Right to Information Act, 2005.

We thought you would find the report of interest.

With kind regards,

Yours sincerely

Suhas Chakma
Director