×

Our award-winning reporting has moved

Context provides news and analysis on three of the world’s most critical issues:

climate change, the impact of technology on society, and inclusive economies.

India's top court orders audit of over three million charities

by Suchitra Mohanty | Thomson Reuters Foundation
Wednesday, 11 January 2017 17:22 GMT

People reach out from behind a fence as they wait to collect free clothes from a local charity in the northeastern Indian city of Siliguri in this 2008 file photo. REUTERS/Rupak De Chowdhuri

Image Caption and Rights Information

Less than 10 percent of 3.3 mln charities operating in India have submitted their financial accounts as per government requirements

By Suchitra Mohanty

NEW DELHI, Jan 11 (Thomson Reuters Foundation) - India's Supreme Court has directed the government to conduct an audit of over three million charities in the country, many of which have received millions of dollars of state funds, but have failed to show where the money was spent.

The top court on Tuesday criticised Prime Minister Narendra Modi's government for not having a regulatory mechanism in place to monitor grants to non-governmental organisations (NGOs), and directed authorities to recover misspent funds and take criminal action against any fraudulent charities.

"It is unfortunate that most of the NGOs do not carry out the exercise of auditing," said the order given by a bench headed by Chief Justice of India Jagdish Singh Khehar.

"Those NGOs who did not file their balance sheets and misused the public funds would have to face action, including civil and criminal prosecution."

The court, which was hearing a petition by lawyer Manohar Lal Sharma to seek proper monitoring of funds to charities, ordered the government to complete the auditing of all non-profit groups and submit its report by March 31.

Less than 10 percent of the 3.3 million charities operating in the country have submitted their financial accounts as per government requirements, according to 2015 data presented to the court by the Central Bureau of Investigation.

These include NGOs which receive government funds for rural development as well as those who receive foreign donations.

Civil society organisations in India have increasingly come under government scrutiny in recent years, particularly since Modi's right-wing nationalist Bharatiya Janata Party swept to power almost three years ago.

More than 10,000 charities have had their licenses to receive overseas donations cancelled or suspended since 2014, hampering their ability to work in areas ranging from health to the environment.

Home Ministry officials say these groups have violated the Foreign Contribution Regulations Act (FCRA) by not disclosing donation details or by using foreign funds to engage in "anti-national" activities.

But many charities say the FCRA is an opaque law and preventing them accessing overseas funds is a move to quell government criticism.

Last June, a group of U.N. experts said they were stunned by the way India was applying the law to stymie its critics, adding the FCRA was "overly broad" and activities deemed political or against the economic interest of the state were vague.

(Reporting by Suchitra Mohanty. Writing by Nita Bhalla @nitabhalla Editing by Katie Nguyen. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, property rights, climate change and resilience. Visit http://news.trust.org)

Our Standards: The Thomson Reuters Trust Principles.

-->