Rs 1000 crore of tax money handed out to bogus NGOs every year!

January 19, 2013

A new report claims that the funding to the tune of hundreds of crores of rupees to voluntary organisations is a scam. The report, titled ‘India’s Funds to NGOs Squandered’ has been released by the Asian Centre Centre for Human Rights. It also slams CAG audits and calls them “infrequent, inadequate” and not inclusive of NGOs.

At least Rs 1,000 crores are provided as grants to NGOs every year by the Government of India. According to data procured through various RTI applications, Central Government Ministries and the State Governments provided at least Rs 6654,35,87,684 as grants to
NGOs/VOs during financial years 2002-2003 to 2008-2009. This translates to an average of Rs 950,62,26,812 every year. Included in this number is Rs 4756,71,26,395 given by the Central Government and Rs 1,897,64,61,289 by the State Governments.

Suhas Chakma, Director of ACHR that States like Madhya Pradesh, Uttar Pradesh, Odisha, Jammu and Kashmir, Arunachal Pradesh, Mizoram failed to provide full information. Also, numbers provided by Central Government Ministries were much smaller than figures in comparison to information placed before both Houses of the Parliament.

“Little information was made available with respect to many flagship programmes including the Mahatma Gandhi National Rural Employment Guarantee Act. 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,” Chakma said and pointed out that these factors make sure that the figure of Rs 6654.36 crores is indicative and not accurate.

Funds given to NGOs / VOs between 2002-2003 to 2008-2009
Ministry of Social Justice and Empowerment
Rs 1,460 crores
Ministry of Women and Child Development
Rs 950 crores
Ministry of Health and Family Welfare
Rs 578 crores
Ministry of Rural Development
Rs 363 crores
Ministry of Tribal Affairs
Rs 343 crores
Ministry of Human Resource Development
Rs 250 crores
Ministry of Science and Technology
Rs 151 crores
Ministry of Development of North Eastern Region and North Eastern Council
Rs 11 crores
Ministry of Youth Affairs and Sports
Rs 125 crores

NGOs interviewed by the ACHR alleged that to have their application approved, required bribes amounting to 15 per cent to 30 per cent of the grant.

“These estimated Rs 1,000 crore bribes must be seen in the context of the Comptroller and Auditor General’s (CAG) Report number 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,” said Chakma.

The Ministry of Rural Development sanctioned 24,760 projects between September 1, 1986 to February 28, 2007. A total of Rs 252,02,44,12.56 was sanctioned as grants to various NGOs. 511 of these NGOs were blacklisted due to irregularities committed. However, only 10 of these blacklisted NGOs were referred to the CBI for investigation. FIRs were lodged in only 101 cases. By August 3, 2009, the number of NGOs blacklisted went up to 830 and FIRs were lodged against 129 blacklisted NGOs.

Even more shocklingly, Rs 46,83,142 were released to blacklisted NGOs 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.

An RTI application filed on July 7, 2005 by the ACHR brought forth a reply from the Ministry of Women and Child Welfare that said M/s Pawan Kumar Garg & Co. engaged by the Bharatiya Adim Jati Sevak Sangh was not a registered firm of Chartered Accountants as per ICAI records.

“The fact that blacklisted NGOs are re-funded and the Ministry of Women and Child Welfare annually granted Rs 110 crores since 2006 to three organisations out of which at least one NGO’s accounts are not even audited by a certified chartered accountant exposes the malaise with Government of India’s funding to NGOs. The investigation of the Ministry of Women and Child Development could not even obtain a response from Bharatiya Adim Jati Sevak Sangh regarding the registration number of M/s Pawan Kumar Garg & Co. with ICAI and the investigated ended there,” Chakma said.

ACHR has recommended the establishment of a ‘National Grants-in-Aid Commission’ through which all grants to the voluntary sector by all the Ministries shall be routed. The recommendation also suggests the commission be responsible for all aspects, of such interactions.

In the meantime, ACHR has requested the Government to screen applications through open call for proposals, consider the applications on merits by independent evaluators, and conduct necessary verification only after shortlisting of applicants.

ACHR has also requested that all Central Ministries, the State Governments and Union Territories be directed to make all information pertaining to the grants to voluntary sector including recommendations of the State Government publicly available as part of the voluntarily disclosure under the Right to Information Act, 2005.

(Data source: ACHR)


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