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The NGO business

Print edition : Feb 11, 2005 T+T-

Non-governmental organisations in Orissa are up in arms against the government's moves to enact legislation that will ensure their accountability and transparency in their funding and a measure of involvement for elected representatives in their working.

in Bhubaneswar

ORISSA ranks poorly in all socio-economic indicators - primary education, health care, agriculture, industrial growth and infrastructure development. As much as 47 per cent of the population lives below the poverty line, while the sale of children and hunger deaths continue unabated according to media reports. The State also has high infant and maternal mortality rates, and the awareness level remains low. But a sense of distrust and suspicion is fast growing between the two major partners in progress - those in power and the non-governmental organisations (NGOs).

The NGOs are up in arms against the Biju Janata Dal-Bharatiya Janata Party (BJD-BJP) alliance government's initiative to formulate a new law to make them accountable. And the relationship between the politicians and NGOs is turning sour by the day. Until recently, those in the government and those running NGOs were patting each other's back and emphasising the need for strengthening the government-voluntary sector alliance.

Politicians have now become critical of the role of the NGOs in open forums. In a recent meeting of the District Collectors in Bhubaneswar, Chief Minister Naveen Patnaik asked them to crush all opposition by NGOs to various industrial projects coming up in the State. Panchayati Raj Minister and secretary-general of the BJD, Damodar Rout, said: "At one point of time, it was desired by the Planning Commission to encourage NGO participation in the socio-economic development process with the hope that there will be healthy competition between the government agencies and voluntary organisations. But finally, it has been observed that the NGOs are running a parallel government with the patronage of senior bureaucrats. A new regulatory mechanism has to be thought of to make the NGOs accountable."

Although the State government is yet to finalise a draft of the proposed legislation, the representatives of numerous NGOs have joined hands to thwart the government's move. The issue has been discussed in the Assembly on two earlier occasions to demand the evolution of a mechanism to ensure greater accountability on the part of the NGOs.

The NGOs formed an organisation called the Orissa Vikas Manch in December. The Manch has been organising meetings at the district level to build a movement against the government's move. It has also brought out a 30-page booklet opposing any new rule that could allow political or bureaucratic intervention in the functioning of NGOs.

Vidhya Das, a worker with Agragamee, a leading NGO, said: "A law to control NGOs would not be used to reign in the NGOs which are actually defaulting. It is quite obviously being brought in to check those organisations which are working for the people, and in fact trying to ensure the implementation of the constitutional provisions and progressive Acts like the 73rd Amendment, the Panchayats Extension to the Scheduled Areas Act, the Minimum Wages Act, and even addressing violation of fundamental rights of the tribal people and Dalits in the State. So we have a situation where the State will actively act against those people who are working to put into place the laws of the country. NGOs and the media should question such a draconian effort to control civil society. There is also a crying need to address the inhuman scale of violations of basic constitutional rights that are going on."

VOLUNTARY organisations play an important role in furthering socio-economic development and addressing problems that are not solved effectively by the government. But since the concept and approaches of voluntary efforts have undergone change, community-based organisations at large are now facing criticism. There have been demands from various quarters that NGOs should be made more transparent and accountable, particularly in respect of the funds they receive from various sources.

Bibhu Prasad Tripathy, a Bhubaneswar-based lawyer said: "A new law will not resolve the controversy involving the State government and the voluntary sector. The need of the hour is to implement properly the existing laws governing NGOs so as to enable the government to ensure transparency and accountability. Amendments in the laws in practice are always welcome."

But politicians from various parties are vocal in questioning the alleged misappropriation of funds by the NGOs. They stress the need for greater accountability on the part of the organisations. Many of them allege that the NGOs are blowing up a sizable portion of their funds in air travel and purchase of vehicles. Several NGOs have been blacklisted for misutilisation of funds, they say.

Finance Minister and BJD leader Prafulla Chandra Ghadei said: "The NGOs should be partners of the government in implementing welfare programmes, but they should have a positive approach and not come in the way of the implementation of government programmes. The receipt of funds by them from government and foreign sources and the utilisation of the same should be in the know of the State government."

The secretary of the Orissa unit of the Communist Party of India (Marxist), Janardan Pati, agrees. He said: "Orissa, being a poor State, needs the presence of NGOs. The purpose of the proposed law should not be to restrict the NGOs, but there should be some mechanism through which the government and the people can know whether the money received by the NGOs was utilised for the benefit of the people."

According to Nayan Kishore Mohanty, vice-president of the Orissa unit of the BJP, the government should not interfere in the work being done by the NGOs, but there should be a law to see whether the funds received by the voluntary agencies from the Central and State governments as well as foreign sources are utilised for the purpose for which they were received.

The Congress, too, is in support of evolving a new mechanism to make the NGOs accountable. "Both government and non-governmental agencies must be complementary to each other, but it is desirable to devise a statutory framework to ensure a better working relationship and accountability between these two sectors," said Prasad Harichandan, spokesperson of the Orissa Pradesh Congress Committee.

The controversy started on April 9, 2001, when the then Finance Minister, Ramakrushna Patnaik, moved a resolution in the Assembly stating that an appropriate policy framework be devised to evolve a suitable collaborative working arrangement between the government and the voluntary sector to ensure that both functioned in a complementary manner, with NGOs being accountable to the state. The resolution was adopted unanimously.

However, the NGOs petitioned the government against the regulations. They contended that NGOs were already working according to the provisions of existing laws such as the Societies Registration Act, the Trust Act, the Cooperative Society Act, the Income Tax Act and the Foreign Contribution (Regulation) Act.

The issue was dropped and nobody talked about it for more than three years. It was on July 16 last year, a few months after the BJD-BJP alliance took over for the second term, that many legislators belonging to both the ruling alliance and the Opposition again raised the issue, especially about the utilisation of funds received by them from various sources. They demanded that elected people's representatives should be included as members in the three-tier - State, district and block levels - committees to coordinate the activities of voluntary agencies in the implementation of welfare programmes. The accounts of NGOs should be audited by the authorities prescribed by the government, they asserted.

Replying to the debate on the issue, Agriculture Minister Surendranath Nayak supported some of the views expressed by the legislators and said that a House Committee would be formed to look into the whole issue and explore what mechanism could be evolved to regulate the functioning of the NGOs.

The House Committee, with 17 members from different parties, held a meeting in September 2004 where it observed that the Planning and Coordination Department of the State government should identify the NGOs and their sources of funding. Some of the members proposed enactment of legislation to regulate the working of the NGOs. The Committee is yet to complete its job.

Acting upon the House Committee direction, the Planning and Coordination Department has asked all the District Collectors to furnish information on the receipt of funds by the NGOs from the State and Central governments, foreign donors and other sources, and their utilisation.

While the issue of evolving a mechanism to control the NGOs is pending, the Planning and Coordination Department has started holding deliberations with the NGOs to finalise a format for the signing of a memorandum of understanding (MoU) between them and the authorities before the implementation of any development project. "The proposed MoU system, when it becomes a rule, will protect well-meaning government officers of fixation of responsibility when an NGO either fails or defalcates money while implementing a particular work with government funds," said Ajit Tripathy, Development Commissioner and Secretary of the Planning and Coordination Department.

WHY are politicians questioning the credibility of the NGOs when many government officials are found indulging in corruption in a big way? One of the factors that have added to their anger is said to be the intervention of the NGOs in the electoral process. For the 2004 Lok Sabha and Assembly elections, the NGOs brought out two separate people's manifestoes asking people to choose the right candidates. A large number of activists campaigned in support of some contestants, while some of them contested the polls, thereby affecting the prospects of full-time politicians.

However, going by official records, it appears that the State government was never serious about ensuring transparency in the functioning of the NGOs in the past. Not even after the State was hit by the super cyclone in October 1999 and thousands of voluntary organisations came forward to work with funds and donations received from different sources. The directory of the NGOs working in the State was last published by the Planning and Coordination Department in 1994.

After a gap over 10 years, on January 3 the Department asked District Collectors to collate information about NGOs operating in their districts, for updating the database that was prepared in 1994. As per the old directory, there were 5,817 voluntary organisations in the State. However, the 12th edition of the directory of voluntary organisations published by the Bhubaneswar-based People's Development Communication Network in 2003 lists 2,863 organisations working in the State.

Whatever be the number of the NGOs, it is a fact that an NGO means big business in Orissa. Many politicians, cutting across party lines, are managing the affairs of NGOs. Bureaucrats are also not far from the business. Many of them run NGOs by proxy while in service and take charge of the organisations after retirement.

Apparently, Orissa has three types of government officers - those who are against the idea of involving NGOs in the implementation of development programmes; those who encourage NGO-government partnership with good intentions; and those who involve NGOs that they run by proxy.

In fact, people belonging to all sections of society have got into the NGO sector in the recent years. The State has many prominent engineering and management institutes that are registered as voluntary organisations. It is a different matter that they charge huge donations from their students and run their organisations as they please.

Interestingly, a registered NGO is also considered a dowry in Orissa, according to a study carried out by the All India Democratic Women's Association (AIDWA). The study, "Expanding Dimensions of Dowry", says: "Several middle and upper income group families interviewed said that they were trying to organise an NGO for the prospective bridegroom because that is what he had demanded!"

The report adds: "This is also a comment on the way that NGOs have become a lucrative business getting funds easily if the right hands were greased."