NGOs that stake a claim to Central grants must disclose their balance sheets of past three years. Proposing this stringent condition, the Centre told the Supreme Court on Monday that the Government intends to make NGOs fall in line with the statutory requirement of filing annual financial returns by imposing this clause from this financial year.
It is for the first time the Centre has decided to crack the whip on flouting NGOs three years after a PIl filed by advocate Ml Sharma raised fingers on NGOs receiving huge donations but disclosing not a penny’s account to the concerned authorities under the Societies Registration Act.
Additional Solicitor General (ASG) PS Patwalia informed a bench headed by Chief Justice Hl Dattu that the Centre is conscious of the large scale violation by NGOs in filing their audited annual accounts. A compilation prepared by the CBI on orders of the apex court revealed that out of 22.45 lakh NGOs in the country, only 2.23 lakh submit annual accounts.
The agency is examining responses received from each State and it sought three months additional time to prepare a final report based on documents received that runs into lakhs of pages. The Bench, also comprising Justices AK Sikri and RK Agarwal, asked Patwalia: “Why these NGOs should not be asked to maintain their accounts.”
In response, ASG said, “We are considering at present that at least for past three years, balance sheets have to be filed by NGOs for release of Government grants (to NGOs).” The bench found the suggestion valuable and asked the law officer to put it on affidavit within two weeks to seek responses from States and Union Territories.
The court issued notices to States of Tamil Nadu and Telangana for not sharing details of registered NGOs and those which file returns. Among states and UTs which provided details, information was found incomplete with regard to Delhi, Odisha, Chhattisgarh, Andhra Pradesh, Madhya Pradesh, Karnataka, Arunachal Pradesh and Haryana.
The most notorious was the State of affairs in Assam, Rajasthan, Kerala and Punjab where despite lakhs of NGOs being registered, not a single has been filing annual audited accounts.