‘If a conservative estimate of 15% is used in “bribes to process applications” then during the FYs 2002-2003 to 2008-2009 at least Rs 998,15,38,153 or Rs. 142,59,34,022 per year were removed from funds to the poor and given in bribes to different layers of officials approving the projects. This is literally stealing the money of the India’s poorest.’ – Asian Centre for Human Rights.
Since mid 2009, Asian Centre for Human Rights (ACHR) carried out a study on Government of India (GoI) funding to the voluntary sector in India. Using the Right to Information Act (RTI) of 2005, ACHR obtained and collated far more information on funding to the voluntary sector than has been hitherto available.
As per the RTI replies from the Central Ministries/Departments, the Government of India released Rs. 4756,71,26,395 as grants to voluntary organizations/Non-Governmental Organisations during the fiscal years (FYs) 2002-2003 to 2008-2009 while the State Governments and Union Territories released Rs. 1,897,64,61,289 during the same period. This implies that a total of Rs. 6654,35,87,684 are released to NGOs/VOs during FYs 2002-2003 to 2008-2009 or an average of Rs. 950,62,26,812 every year.
These figures are only indicative and not accurate. First, a number of key States such as Madhya Pradesh, Uttar Pradesh, Orissa, Jammu and Kashmir, Arunachal Pradesh, Mizoram, Dadra and Nagar Haveli, Daman and Diu and Lakswadeep failed to provide any information under the RTI Act. Second, many departments of the State Governments and Union Territories (UTs) which replied did not provide full information. Third, the Central government Ministries provided much less figures under the RTI applications in comparison to information placed before the Parliament (both Lok Sabha and Rajya Sabha). Fourth, little information was made available with respects to many flagship programmes including the Mahatma Gandhi National Rural Employment Gurantee Act. Fifth, many of the government owned Public Sector Undertakings did not provide the funds given to the NGOs as part of the Corporate Social Responsibility and therefore, not included. The actual amount sanctioned to the NGOs is much higher than Rs 1000 crores per year.
The Government of India (GoI) is clearly best placed to manage these funds but equally has a responsibility to ensure that tax payers’ money is transparently and efficiently spent on a clear set of well defined priorities that are determined in a democratic process. The government of India cannot claim to have fulfilled any of these conditions.
It is clear from the research that vast sums of Indian tax payers’ money are being misused and mismanaged in the name of India’s poorest. Fund management to the voluntary sector is in a parlous state. This impacts India’s ability to reach out to the most vulnerable and India’s wider fight against extreme poverty, discrimination and conflicts.
The selection procedure for the grantees lacks transparency. All the Ministries claim that applications are selected on the basis of merit. But how that merit is determined is unclear. In reality, merit matters little. There is a mandatory requirement of recommendations from the State Governments (District Magistrate and Secretary to the Department concerned). These recommendations are not guarantees for selection of an application and it further requires lobbying at the Central Ministries.
In overwhelming majority of the cases only those voluntary organizations which are close to the government officials or those who have control over the officials/NGOs i.e. political leaders are selected. The Government Ministries/Departments often fail to comply with their own due diligence requirements. The Comptroller and Auditor General (CAG) in its 13th Report of the Public Accounts Committee 2004-2005 with respect to the Council for Advancement of People’s Action and Rural Technology (CAPART) found that prefunding appraisal testing was not conducted in 49 out of 50 cases under the Central Rural Sanitation Programme (CRSP) Scheme. Even in the Accelerated Rural Water Supply Programme (ARWSP) Scheme in 110 cases, no evaluation was done at any stage in 22 cases and post evaluation was done in 5 cases only. In 22 cases, no progress reports were received at all while in 51 cases there was no follow up.
Field studies by ACHR suggest that selection of grantees is often determined not on ability or technical expertise but rather on the applicant’s ability to pay a bribe. The NGOs interviewed by the ACHR alleged that to have their application approved required bribes amounting to 15% to 30% of the grant.
If a conservative estimate of 15% is used as a “bribe to process the applications”, during the Fiscal Years 2002-2003 to 2008-2009 at least Rs. 998,15,38,153 or Rs. 142,59,34,022 per year were spent on “bribes” to different layers of officials approving the projects. This is literally stealing the money of the India’s poorest. It will not be an understatement that funding to voluntary sector is largely decided by bribes and political influence.
There is little accountability beyond blacklisting. The CAPART under the Ministry of Rural Development sanctioned 24,760 projects during 1 September 1986 to 28 February 2007 involving a total sanctioned grant of Rs 252,02,44,12.56. Out of these, 511 NGOs were placed under the blacklist category due to irregularities committed. However, out of 511 blacklisted agencies/NGOs only 10 cases were referred to the Central Bureau of Investigation (CBI) for investigation while the First Information Reports (FIRs) were lodged against only 101 NGOs. It was reported that around 4,000 files related to unaccounted funds disbursed to voluntary organisations were feared missing from the CAPART and the CAPART reportedly had specific details about just 301 missing files. By 3 August 2009, the number of NGOs blacklisted by the CAPART increased to 830 and FIRs lodged against 129 blacklisted NGOs. The CAPART even released Rs. 46,83,142 to five blacklisted NGOs.
The Ministry of Environment and Forests is a classic case of corruption related to grants made to NGOs. The CAG in its report tabled in the Parliament on 26 November 2010 indicated the presence of an organised scam in the giving of grants by the Ministry of Environment and Forests to NGOs and stated that no accounts had been maintained by the Ministry for more than 20 years against grants worth Rs 597 crores released to NGOs and expenditures incurred thereon.
With respect to the grants-in-aid to NGOs under the National Rural Health Mission (NRHM) of the Ministry of Health and Family Welfare, the CAG observed that there is absence of any defined accountability structure and monitoring mechanism with regards to grants released to NGOs and the funds were release without signing Memorandum of Understandings by the State Health Societies.
Obviously, there is a lack of effective management and controls on the grants and a lack of effective and transparent monitoring. There are a range of systems proposed by different agencies but implementation of these commitments appears largely absent. The mechanisms remain on paper only. The audit by the CAG which takes place once in a decade for a particular Ministry has not helped to address the gaps. This means in effect that the GoI is guilty of not only disbursing huge sums of money on projects that actually achieve nothing, but far worse, that it has no means of knowing as to why a project has failed. The inference is that the government will continue to disburse grants in the future by the same implementing NGOs, oblivious to the fact that they are achieving nothing.
Recommendations
The Indian economy is growing rapidly and the Government of India is allocating more resources than ever as it also rejects foreign aid. The “NGO Partnership System” initiated by the Planning Commission of India in 2009 at best provides unverified data-base of NGOs.
Many in the voluntary sector have been doing excellent work and the voluntary sector shall remain indispensable to outreach India’s most vulnerable. As India involves the NGOs/ VOs in the implementation of its programmes more than ever, India must realize that funding to voluntary sector is not something that can any longer be done as part time job of the government officials, many of whom are the ultimate and illegal beneficiaries of the funds granted to the voluntary sector. The need for transparency and accountability for funding to the voluntary sector can no longer be ignored.
India needs to recognize that funding to the voluntary sector requires an independent and specialized agency with dedicated and specialized staff.
In order to address these problems, Asian Centre for Human Rights recommends the following to the Government of India:
- Establish a “National Grants-in-Aid Commission” through which all grants to the voluntary sector by all the Ministries shall be routed through. The “National Grants-in-Aid Commission” shall be responsible for all aspects, inter alia, calls for proposals, selection of proposals, monitoring of implementation, review of reports, recovery of funds etc; and
- In the interim period, direct (i) all the Ministries to do away with current process of recommendations by the District Magistrates and the State Governments, invite applications through open call for proposals, consider the applications on merits by independent evaluators, and conduct necessary verification only after short-listing of the applicants; and (ii) direct all the Central Ministries, the State Governments and Union Territories to make all information pertaining to the grants to voluntary sector including recommendations of the State government publicly available as part of the voluntarily disclosure under the Right to Information Act, 2005.