Non-governmental organisations in India

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Indian non-governmental organisations (NGOs) can be set up under various Indian laws.

Types of legal entities

The different legal entities under which civil society organisations can register themselves are:

Registered societies

Societies Registration Act, 1860 is a Central Act for registering not-for-profit organisations. Almost all the states in India have adopted (with modifications, if any) the Central Act for creating state-level authorities for registering various types of not-for-profit entities. According to the Act, any seven persons who subscribe to the Memorandum of Association (MOA) can register a society. The memorandum should include the name of the society; its objectives; names, addresses and occupations of the members subscribing to it as well as the first governing body to be constituted on registration.

Trust

Public trust

Public trusts can be created for public charitable purposes. There is no All India Level Act for setting up public charitable trusts. Some of the states in India have enacted the Public Charitable Trust Act, while most states in India do not have a trust Act. An NGO can be created only under a public trust Act. Madhya Pradesh and Rajasthan have independent state-level public trust Acts. States like West Bengal, Jharkhand and Bihar do not have any Act to register a public trust.

A trust can be registered in one state, but the same has the scope to operate in any number of states. In the statesof Maharashtra and Gujarat, all organisations that are registered as Society are by default also registered as public trusts under Bombay Public Trust Act, 1950.

Private trust

A private trust, created under and governed by the Indian Trusts Act of 1882, aims at managing assigned trust properties for private or religious purpose. A private trust does not enjoy the privileges and tax benefits that are available for public trusts or NGOs.

Non profit companies

Further information: Non-profit laws of India § Section 8, Companies Act 2013

Conferring of corporate personality to associations that promote cultural and charitable objectives, but exempting them from some cumbersome requirements (which are essentially for regulation of business bodies but are difficult for compliance by non-profit companies), are the noteworthy features that are provided under the Companies Act, 2013.

According to section 25(1) (Companies Act, 1956): "Where it is proved to the satisfaction of the Central Government that an association is about to be formed as a limited company for promoting commerce, art, science, religion, charity or any other useful objectives, intends to apply its profits, if any, or other income in promoting its objectives, and to prohibit the payment of any dividend to its members, the Central Government may, by license, l direct that the association may be registered as a company with limited liability, without addition to its name of the word "Limited" or the words "Private Limited".

Comparison between a trust, a society and a non-profit company

	Public Trust	Society	Section 8 Company
Statute/Legislation	Indian Trust Act 1882	Societies Registration Act of 1860	Companies Act of 2013
Jurisdiction of the Act	Concerned state where registered	Concerned state where registered	Concerned state where registered
Authority	Charity Commissioner/Deputy Registrar	Registrar of Societies	Registrar of Companies
Registration	As Trust	As Society (and by default also as Trust in Maharashtra and Gujarat)	As Section 8 Company
Main Document	Trust deed	Memorandum of Association and Rules & Regulations	Memorandum and Articles of Association.
Stamp Duty	Trust deed to be executed a non-judicial stamp paper of prescribed value	No stamp paper required for Memorandum of Association and Rules & Regulations	No stamp paper required for Memorandum and Articles of Association
Number of persons needed to register	Minimum two trustees; no upper limit	Minimum seven, no upper limit	Minimum two, no upper limit
Board of Management	Trustees	Governing body or council/managing or executive committee	board of directors/Managing Committee
Mode of succession on board of management	Usually by appointment	Usually election by members of the general body	Usually election by members of the general body

Types based on use

Co-operative societies

In India, cooperative societies are regarded as instruments to mobilise and aggregate community effort to eliminate layers of middlemen in any product or service supply chain hence resulting in greater benefit sharing for the grassroot farmer, worker or artisans. The Cooperative Credit Societies Act, 1904 enabled formation of cooperatives for supplying to farmers cheap credit and protect them from exploitation in the hands of the moneylenders. The cooperative act 1912 expanded the sphere of cooperation and provided for supervision by central organisation.

Multi-state co-operative societies

The Multi-state Co-operative Societies Act, 2002 which substitutes the earlier statute of 1984, facilitates the incorporation of cooperative societies whose objects and functions spread over to several states. The act provides for formation of both primary (with both individual and institutional members) and federal cooperatives (with only institutional memberships). Any application for the registration of a multi-state cooperative society, of which all the members are individuals, should be signed by at least fifty persons from each of the states concerned. In case of a society of which members are cooperative societies, it should be signed by duly authorised representative of at least five such societies registered in different states.

Trade unions

Trade union means any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more Trade Unions.

Religious bodies

Religious bodies are frequently registered as NGOs.

Laws governing NGOs in India

Main article: Non-profit laws of India

Controversy

Foreign Funding Allegation

Intelligence Bureau, in a report accused "foreign-funded" NGOs of "serving as tools for foreign policy interests of western governments" by sponsoring agitations against nuclear and coal-fired power plants and anti-GMO agitation across the country. The NGOs are said to be working through a network of local organisations to negatively impact GDP growth by 2–3%. The report says,

A significant number of Indian NGOs funded by donors based in US, UK, Germany and Netherlands have been noticed to be using people-centric issues to create an environment, which lends itself to stalling development projects.

It alleged that Greenpeace was leading a "massive effort to take down India's coal-fired power plant and coal mining activity" by using foreign funds to "create protest movements under 'Coal Network' umbrella at prominent coal block and coal-fired power plant locations in India". The Intelligence Bureau said the foreign NGOs and their Indian arms were serving as tools to advance Western foreign policy interests. "Greenpeace aims to fundamentally change the dynamics of India's energy mix by disrupting and weakening the relationship between key players," the IB report said.

In April 2015, the Government of India shared a list of over 42,000 NGOs with Financial Intelligence Unit (FIU) to check suspicious foreign funding amid the crackdown on some top international donors for flouting the Foreign Contribution (regulation) Act, 2010. These 42,273 NGOs were put under watch after intelligence reports claimed that several charity organisations are diverting funds for purposes other than the permitted use of foreign contribution. The list includes NGOs operating in cultural,religious, social, economic and educational fields. For the first time, the government has clearly defined the sectors in which it has listed Christian missionaries, Hindu, Sikh and Muslim religious groups receiving foreign contribution besides other activities of NGOs in which funds are claimed to be utilised. There is also suspicion that money launderers could use the legitimate route to wire illicit money. Many of them are Christian Missionaries and other religious groups who are found to evade taxes.

Following the enquiry, permits of about 8,875 NGOs have been revoked for a variety of reasons ranging from non-filing of returns or non-compliance with Foreign Contribution Regulation Act (FCRA).

References

Mathew Cherian, Director CAF India
"Multi-State Co-operative Societies Act, 2002". wirc-icai.org. Retrieved 1 August 2023.
"Foreign-funded NGOs stalling development: IB report – The Times of India". The Times of India. 12 June 2014. Retrieved 24 October 2015.
^ "Intelligence Report Claims Foreign-Funded NGOs Hurt India's Economy". India. Retrieved 24 October 2015.
"Intelligence Bureau says Greenpeace endangers economic security". Reuters India. Archived from the original on 8 December 2015. Retrieved 24 October 2015.
^ "Over 42,000 NGOs Under Government Scanner". The New Indian Express. Archived from the original on 1 May 2015. Retrieved 24 October 2015.
"NGO under Scanner for Diverting Funds". The New Indian Express. Archived from the original on 25 November 2015. Retrieved 24 October 2015.
"Vatican Charity Funded Political Activities, Put Under Government Scanner: Sources". NDTV.com. Retrieved 24 October 2015.
Burnett, John. "Can A Television Network Be A Church? The IRS Says Yes". NPR.org. Retrieved 24 October 2015.
"4,470 NGO Licences cancelled: Sisodia's Kabir, DU, JNU on list". The Indian Express. 10 June 2015. Retrieved 24 October 2015.

External links

"State-wise list of VOs/NGOs signed up on the NGO Partnership System". Government of India.
For reading about the role of the Indian NGOs in ameliorating the hardships of child-labourers, one can consult Sreeparna Chattopadhyay's The Samaritans for Child-labourers(New Delhi: Authors Press, 2021) (ISBN 978-93-90588-16-9)

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