In a bid to keep a tab on NGOs and charity organisations that allegedly engage in money laundering after the NDA government's crackdown on black money, the Income Tax Department has demanded the organisations to file a report on the money they possessed before 8 November when the demonetization was announced. The transactions in their accounts after the currency ban would also come under strict scrutiny. 

 

There were reports that some NGOs are functioning as safe means to exchange black money. As per the data with the Home Ministry, the NGOs and charitable organisations in the state recorded a 160% spike in foreign funds in 2014-15 when compared to the previous year. As much as ₹ 2511 cr was pumped into 1620 organisations in the year alone. In six years starting from 2010, the NGOs in the state thrived on a whopping ₹ 6,700 cr sent in from foreign shores. 

Kerala NGOs and foreign funding: 

  • 1620 NGOs received ₹ 2511 cr from foreign countries in 2014-15

National scene: 

  •  3,068 NGOs received ₹ 22,000 cr in 2014-15 
  • 2301 NGOs got ₹ 12,000 cr in 2013-14
  • (These are NGOs who reported receiving more than ₹ 1 crore from foreign donors)  

 


Replying to a question in the Lok Sabha recently, Union Minister of State for Home, Kiren Rijiju said that the government was keeping a strict vigil against the violation of  Foreign Contribution (Regulation) Act, (FCR) 2010 and the FCR Rules (FCRR) which came into force a year after. 
 

 
Crackdown on NGOs in India. 
 Cancellation of FCR licence:  4138 associations in July 2012;   10,117 in March 2015

  •  FCR violation cases 15 cases referred to CBI 
  • 10 cases referred to State Police 
  • Accounts of 23 NGOs frozen.
  • 20 NGOs prohibited from receiving the foreign fund.  
  • Penalty to the tune of  ₹5,20,82,031 imposed on 341 associations in 2014. 
  •  A total fine of  ₹51,99,526 imposed on 24 associations 

 

The minister said that the government was constantly monitoring the violations of FCRA through various security agencies. He also informed that the government had plans to amend some provisions of FCRR to simplify the procedure and to enhance transparency and accountability.  

 

Apparently, the tight squeeze by the central government and the strict vigil by intelligence agencies have had limited impact on the flow of foreign funds to NGOs. The intelligence agencies had warned that extremists could use these funds. The foreign NGO funds channelled through North Korea, Syria, Cuba, Kirgistan, Luxemburg and Malta had raised eyebrows. 

 

Taking the lead from the reports that the NGOs have become a safe means to money laundering after the currency ban, the IT Department has issued a notice to disclose the funds they have and their bank accounts and transactions after demonetization would be under scrutiny.