Babu Jagjivan Ram, the father of Meira Kumari, our current speaker in parliament was at one point a very important Dalit face of the Congress party. He was from the Chamar caste and was a leader for his community andwas; founded the 'All-India Depressed Classes League', an organization dedicated to attaining equality for untouchable. And yet, he had a huge, white palatial house and maintained a lavish lifestyle in the otherwise highly impoverished surroundings of Sasaram, Bihar, that made him a laughing stock on his commitment to the cause he supposedly espoused.
If Babu Jagjivan Ram was one of the symbols of national corruption in the 70s and 80s, many of our so called leading NGO leaders could be considered his modern avatars. These are owners of mega-networks of NGOs whose turnover runs in tens and even hundreds of crores. If the common man is shocked by the quantum leap of wealth of our political classes, if NGO leaders are made to declare their wealth mandatorily, they are in for a greater shock.They have amassed mind-boggling, mostly ill gotten wealth to sustain multiple generations of opulent living; own many palatial bungalows in addition to ownership of vast real estate properties. These are one of India's most jet setting of classes, wear designer clothes, send their children abroad for education; prefer international vacations, and frequent the most expensive eating places and pubs in the country. Apart from outright corrupt practices, a section of them funnel funds to terror groups and willingly became an important cog-in-the-wheel of international and local money laundering operations. And yet, they appear on TV news discussion panels and take the name of the people to buttress their positions.
More despicably, they live off the grassroots workers who are paid pittances for their commitment. These lowly, Human Rights Defenders or Dalit and RTI activists are beaten up, maimed or killed every day in our country. Shehla Masood, a prominent RTI worker in Madhya Pradesh was killed during Anna's Ramlila fast. And yet, neither Anna or his team, had a rebuke for the killers or demanded better protection for thousands of RTI activists who expose corruption at great risk to their lives and families. The fact is, they simply do not care as long as their cash registers keep ringing.
It is not the case of this post to say that the present lot of NGO leaders did not contribute their mite to the struggle. Most probably they did. They struggled through a period of scarce resources, political exclusion, and skepticism from state bureaucrats. They survived only to find destiny take a sudden turn in the 1990s. Now lavished with funds; with donors deliberately turning the other way of their acts of misappropriation, their egos stoked with international awards such as Magsaysay - all brought about the apotheosis of NGOs as disguised state functionaries and administrators of official aid. NGOs originally were built for their smallness, community orientation, efficiency, political activism and now this edifice is in the danger of crumbling. Today's NGO mega networks have now become totally institutionalized, mainstreamed, and dependent as they have become co-opted and corrupted by their external funders.
Yet, it is the same set of leaders who now occupy pivotal positions that could influence key social, economic, and political policy in the country. The same set who attempted to replicate the Arab Spring in India through whipping up public passions against the corruption by our political classes. These are leaders of large NGO empires that function as prolonged arms of foreign governments and corrupt corporates. It is an irony of sort that while the stock of these same NGOs are relatively going up in urban middle class pockets within this country where they never had a base in the past, they have mostly lost credibility among the rural masses today. People in rural areas have gone wise, have started demanding money for participation in NGOs programme as they believe that NGOs are getting money in their name and amassing wealth. NGOs have lost their credibility with people because they are not consistent, transparent, honest and accountable to their work being done.
They perhaps over-reached themselves when supporting Anna Hazare's anti-corruption campaign. The empire has struck back. Some of them already find themselves in an eye of a Home Ministry investigation. Coming soon, the accounting and audit norms for NGOs are to be made more stringent. The question is whether it would be strong enough to burst the bubble??
Coming Soon: New Accounting Norms for NGOs
The government is set to frame new accounting norms for non-governmental organizations (NGOs), as it looks to remove the veil over the flow and utilization of funds by the sector that is not entirely above suspucion.
The Ministry of Corporate Affairs is working on a more structured financial reporting format for civil society organizations. It recently asked the Institute of Chartered Accountants of India (ICAI), the accounting regulator, to overhaul the accounting and disclosure norms for NGOs.
The NGOs, which have for long been shrouded in suspucion due to money laundering, terror funding and corporate corruption, have suddenly caught attention of the government, partly due to allegations of corruption in the Indian Premier League. And more recently due to allegations of funds mishandling by the Commonwealth Games Organizing Committee.
"Unlike companies, NGOs do not follow a structured format for financial reporting, due to which it gets difficult to track their flow of funds," said a ministry official. The proposed format will ensure that grants pouring in from within and outside the country are properly accounted for" said the official, requesting anonymity.
The format will focus on aspects like utilization of grants and contributions received by NGOs and strict complaince with provisions of the Foreign Contribution Regulation Act (FCRA). A group, which has been constituted to debate and recommend suggestions to ensure better governance of NGO, will look to enhance transparency over related party disclosures, cash flows and reporting of an NGOs interest in joint ventures as well as of their investments, said an official in the ICAI.
ICAI Presiden Amarjit Copra says: "There is a need for improvement in matters of accounting and utilization of funds by NGOs". He added a group has already been formed to recommend changes.
While experts have welcomed the move on framing new norms for NGOs, they feel the government should stress on governance for such bodies. "From the point of the government, it will help them to understand the money flow of the organizations, their assets and liability. "Of late NGOs have been floated to divert money and avoid taxes," said Resmi Bhaskaran, fellow at New Delhi-based think tank - Institute of Human Development.
The government will simultaneously empower the Comptroller and Auditor General of India (CAG) to audit NGOs through the proposed amendments to its governing lae, presently being considered by the finance ministry. The government is particularly concerned about the financial reporting standards of organizations that are receiving funds from abroad.
"A standard format on financial reporting for NGOs will ensure greater comparability between firms, as currently there is no clear standard or benchmark in the way these firms report on aspects governing grants received by them" another expert on the role of NGOs in the micro-financing domain.
"The need of the hour is to know the way any charity or donation is used by a NGO. The accounting system should ensure maintaining a continuous review of the receipt and payment related with the specific project for which any grants are remitted," said Satanu Mishra, Executive Trustee, Smile Foundation, a New Delhi based NGO, adding that the current system of accounting transactions on grants or donation received by a NGO need to be elaborated.