UPSC GS Study Notes


Non-Governmental Organizations (NGOs)

  • 10 Jul,2023
  • Team ExamGuru


GS-II Development Processes & the Development Industry Non-governmental - NGO

Non-Governmental Organizations (NGOs)        

  • A Non-Governmental Organizations (NGOs) is a nonprofit, voluntary citizens’ group which is organized on a local, national or international level. NGO is a broad term encompassing a wide array of diverse organizations.
  • The World Bank defines NGOs as “private organizations that pursue activities to relieve suffering, promote the interests of the poor, protect the environment, provide basic social services or undertake community development“.
  • These organisations are not a part of the governement, have a legal status and are registered under the specific Act (Societies Registration Act, 1860 in India) of the government.
  • The term NGO in India denotes wide spectrum of organisations which may be non-governmental, quasi or semi governmental, voluntary or non-voluntary etc.
  • NGOs are task-oriented and driven by people with a common interest. They perform a variety of services and humanitarian functions by bringing citizen concerns to Governments. NGOs advocate, monitor government policies and encourage more political participation through provision of information.
  • NGOs can work for different issues such as human rights, environment or health. They are generally considered to be non-state, non-profit oriented groups who pursue purposes of public interest. In addition to providing analysis and expertise. NGOs also serve as early warning mechanisms.
  • The structures of NGOs vary considerably. There can be global hierarchies, with either a relatively strong central authority or a more loose federal arrangement. Alternatively, they may be based in a single country and operate transnational. With the improvement in communications more locally-based groups referred to as grass-roots organizations or community based organizations have become active at the national and global level.

Origin of Term

  • The term “Non-Governmental Organization” or NGO, came into existence in 1945 because of the need for the UN to differentiate in its Charter between participation rights for intergovernmental specialized agencies and those for international private organizations.

Types of NGOs

NGO can be classified on the basis of their orientation and level of operation.

Based on Orientation

  • Charitable Orientation: It involves a top-down effort with very little participation by the “beneficiaries”. It includes NGOs with activities directed toward meeting the needs of the poor -distribution of food, clothing or medicine; provision of housing, transport, schools etc. Such NGOs may also undertake relief activities during a natural or man-made disaster.
  • Service Orientation: It includes NGOs with activities such as the provision of health, family planning or education services in which the NGOs participate in the designing, implementation of programmes as well as in receiving the service.
  • Participatory Orientation: It is characterized by self-help projects where local people are involved, especially in the implementation of a project by contributing cash, tools, land, materials, labour etc. The participation begins with the need and continues into the planning and implementation stages. Cooperatives often have a participatory orientation.
  • Empowering Orientation: These NGOs aim to help poor people develop a clearer understanding of the social, political and economic factors affecting their lives. Sometimes, these groups develop spontaneously around a problem or an issue, while at other times, outside workers from NGOs play a facilitating role in their development. There is maximum involvement of the people with NGOs acting as facilitators.

Based on Level of Operation

  • Community-based Organizations (CBOs) arise out of people’s own initiatives. These can include sports clubs, women’s organizations, neighbourhood organizations, religious or educational organizations. There are a large variety of these some supported by NGOs national, or international NGOs, or bilateral or international agencies, and others independent of outside help. Some are devoted to rising the consciousness of the urban poor or helping them to understand their rights in gaining access to needed services while others are involved in providing such services.
  • Citywide Organizations include organizations such as the Rotary or lion’s Club, chambers of commerce and industry, coalitions of business, ethnic or educational groups and associations of community organizations. Some exist for other purposes and become involved in helping the poor as one of many activities, while others are created for the specific purpose of helping the poor.
  • National NGOs include organizations such as the Red Cross, YMCAs/YWCAs, professional organizations etc. Some of these have state and city branches and assist local NGOs.
  • International NGOs range from secular agencies such as Redda Barna, Save the Children organizations, OXFAM, CARE, Ford and Rockefeller Foundations to religiously motivated groups. Their activities vary from mainly funding local NGOs, institutions and projects to implementing the projects themselves.

Need of NGOs

  • Two-Way Communication: NGOs act as a two-way communication channel i.e. upward from people to the government and downward from the government to people. Upward Communication involves informing government about views of local people while downward communication involves informing local people about what the government is planning and executing.
  • Self Organization: NGOs enable people to work together voluntarily to promote significant social civic values. They promote local initiative and problem solving. Through their work in a broad array of fields – environment, health, poverty alleviation, culture & the arts, education, etc. NGOs reflect the diversity of society itself. They also help the society by empowering citizens and promoting change at the “grass roots”.
  • Representative of Poor: NGOs bring social issues to the fore and thus act as a spokesperson for the poor. They adopt various means to increase awareness among people leading to more and more participation from people. Thus, influencing the government decision-making on people’s behalf.
  • Improved service delivery: With the help of NGOs government officials mingle with private individuals to find solution to various societal problems. This allows for smooth functioning due to involvement of locals at all levels i.e., from policy making to policy implementation. Also, more involvement of people increases transparency and thus reduces corruption at all levels.
  • Crises management: NGOs play critical role in promoting intercommunity harmony and authorities often take their help to manage riots and hostile situations. Apart from it NGOs also play positive role in assisting in relief work undertaken by government during natural and man made disasters.

Activities undertaken by NGOs                        

  • Advocacy, Analysis and Awareness Raising – acting as a voice for people both on a representative and self-appointed basis; researching, analyzing and informing the public about issues; mobilizing citizen action through media campaigns and other forms of activism; and lobbying business leaders and policymakers.
  • Brokerage – acting as an intermediary between different sectors and groups.
  • Conflict resolution – acting as a mediator and facilitator.
  • Capacity Building – providing education, training and information.
  • Delivery of services – operational delivery of essential humanitarian, development and/or social services.
  • Evaluation and Monitoring – serving as a ‘watchdog’ or third party / independent ‘auditor’, invited and uninvited, of government and corporate performance, accountability and transparency.

Contribution to Good Governance

  • They act as a watchdog for government policies and human right violations.
  • They disseminate information to people including weaker sections of the society about their rights, responsibilities and entitlements.
  • They also become service providers at many places where government has not been able to reach. Thus, act as a helping hand to the government.
  • They mobilize people and opinions for or against a government policy, thus creating an environment of participative democracy. Many a times, they also become catalyst of policy innovations.
  • They increase the transparency by bringing in the social audit of government services and accounts.

Legislations regulating the finances of NGOs

Foreign Contribution (Regulation) Act (FCRA), 2010

  • Foreign funding of voluntary organizations in India is regulated under FCRA act and is implemented by Ministry of Home Affairs.
  • The acts ensure that the recipients of foreign contributions adhere to the stated purpose for which such contribution has been obtained.
  • Under the act organisations require to register themselves every five years.

Foreign Exchange Management Act, 1999

  • Foreign Exchange Management Act (1999) aims to consolidate and amend the law relating to foreign exchange with objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
  • A transaction under FEMA is called a fee or a salary while the same under FCRA is called a grant or a contribution.
    • In 2016, the powers of Ministry of Finance to monitor NGOs were placed under the FEMA. The idea was to bring all NGOs, which receive foreign contributions, under one umbrella for better monitoring and regulations. The step was taken to that ensure only one custodian monitors flow of foreign funds to these organisations.

Constitutional Provisions for NGOs in India

  • Article 19(1)(c) on the right to form associations;
  • Article 43 which highlights the State’s having an endeavor to promote cooperatives in rural areas;
  • Concurrent List in Entry 28 mentions about – Charities and charitable institutions, charitable and religious endowments and religious institutions”.

National Policy on Voluntary Sector 2007

To be covered under the Policy, VOs should broadly have the following characteristics:

  • They are private, i.e., separate from Government
  • They do not return profits generated to their owners or directors
  • They are self-governing, i.e., not controlled by Government
  • They are registered organizations or informal groups, with defined aims and objectives.


The specific objectives of the policy are listed below:

  • To create an enabling environment for VOs that stimulates their enterprise and effectiveness, and safeguards their autonomy:
  • To enable VOs to legitimately mobilize necessary financial resources from India and abroad;
  • To identify systems by which the Government may work together with VOs, on the basis of the principles of mutual trust and respect, and with shared responsibility: and
  • To encourage VOs to adopt transparent and accountable systems of governance and management.

Success Stories

In recent years, NGOs have chalked up many important accomplishments. They put the environment on the global agenda and pressed reluctant nation states to take it seriously. They insisted that human rights deserve universal respect and embarrassed states into greater compliance. They pressed for the rights and well-being of children, the disabled, women, indigenous peoples. They forced powerful countries to come to the table on disarmament. Scarcely any recent progress in human wellbeing does not owe a good deal to NGOs:

  • Many NGOs have worked hard to include children with disability in schools, end caste-based stigma and discrimination, prevent child labour and promote gender equality resulting in women receiving equal wages for the same work compared to men.
  • During natural calamities they have played an active role in relief and rehabilitation efforts, in particular, providing psycho-social care and support to the disaster affected children, women and men.
  • NGOs have been instrumental in the formation and capacity building of farmers and producers’ cooperatives and women’s self- help groups.
  • NGOs have implemented the Jeevan Dhara programme for creation of wells for safe drinking water; promoted community toilets for total sanitation, and supported the public health programs on immunisation and for eliminating tuberculosis and malaria.
  • NGOs have significantly influenced the development of laws and policies on several important social and developmental issues such as the right to information, juvenile justice, ending corporal punishment in schools, anti-trafficking, forests and environment, wildlife conservation, women, elderly people, people with disability, rehabilitation and resettlement of development induced displaced people to name a few.
  • Akshaya patra feeds more than 12 lakh children everyday thus contributing in fight against hunger and malnutrition.
  • In many of the isolated and difficult to access areas of India, people are uneducated, some don’t have livelihoods, and have poor healthcare services. Thus, Smile Foundation has been helping issues relating to healthcare, women empowerment, education, and providing livelihoods.
  • Help Age India is an example of an Indian NGO who has gained recognition nationally for the efforts they have put into the aid they have provided for the elderly.

Problems and Challenges

  • Misappropriation of funds: Massive amount of money flows into NGOs. This requires accountability and transparency in its functioning which are key for operational efficiencies. Over the years, corporate sector has recognized and adopted best governance practices through appropriate channels. The NGO sector should also look to adopt best global practices for rapid and timely development of the nation.
  • The external issue of funding: According to government data a total of 3,068 non-governmental organizations (NGOs) received foreign funding above Rs. 22,000 Or. in 2014-15. It is often said that foreign-funded NGOs tries to propagate the foreign propaganda to stall developmental projects, Example: Kudankulam Protest. There is a huge flow of funds into the non-government organization sector and this requires prudence and good practices to maintain accountability and transparency to the benefit of all stakeholders.
  • Non accountable, nontransparent undemocratic functioning: CBI records filed in the Supreme Court show that only 10% of the total registered NGOs under the Societies Registration Act file annual financial statements, some of the local and national NGOs have been found involved in malpractices and acting irresponsibly, thus undermining the credibility of civil society. It’s a huge concern and poses a great challenge to the development movement spearheaded by NGOs in the country.
  • Money Laundering: Corrupt or unscrupulous NGOs that receive foreign funds may serve as conduits for money laundering.
  • Lack of transparency in the functioning of a large proportion of NGOs leads to aversion in donating funds for charitable causes since the general public is largely cynical about the ‘genuineness’ of the nonprofit spirit of the sector.
  • Issue of lack of trust and coordination between public sector and Non government organisations.
  • FCRA related issues: Over 1,800 NGOs and academic institutes found to be violating laws like Foreign Contribution (Regulation) Act(FCRA) have been banned by the government from receiving foreign funds.


  • The implementation of a strategic framework is essentially important in the management of an NGO. The endorsement of such a framework brings in professionalism and internal control mechanisms, which further makes the organization’s performance more effective.
  • Developing strategies also include establishing a mechanism of consistent monitoring of whether they are being implemented and linking the results to the organization’s goals.
  • There is need to bolster public confidence in the voluntary sector by opening it up to greater public scrutiny.
  • The Government should encourage Central and State level agencies to introduce norms for filing basic documents in respect of NGOs, which have been receiving funding from Government agencies and placing them in the public domain (with easy access through the internet) in order to inculcate a spirit of public oversight.
  • Public donation is an important source of funds for the NGO sector and one that can and must increase substantially. Tax incentives play a positive role in this process. The Government could simplify and streamline the system for granting income tax exemption status to charitable projects under the Income Tax Act.
  • The Government may consider tightening administrative and penal procedures to ensure that these incentives are not misused by paper charities for private financial gain.
  • The Government should encourage all relevant Central and State Government agencies to introduce pre-service and in-service training modules on constructive relations with the voluntary sector. Such agencies need to introduce time bound procedures for dealing with the voluntary organisations. These could cover registration, income tax clearances, financial assistance, etc.
  • There must be a formal system for registering complaints and for redressing grievances of NGOs.
  • The Government should encourage setting up of Joint Consultative Groups / Forums or Joint Machineries of government and voluntary sector representatives, by relevant Central Departments and State Governments.
  • It also needs to encourage district administrations, district planning bodies, district rural development agencies, zila parishad and local governments to do so. These groups could be permanent forums with the explicit mandate to share ideas, views and information and to identify opportunities and mechanisms of working together.
  • The Government also might introduce suitable mechanisms for involving a wide cross-section of the voluntary sector in these Groups/Forums.


  • We are entering into an important phase where there are many targets that the government intends to achieve with the active collaboration of voluntary organisations. Therefore, it is important to conduct an effective review or report card of the National Policy with specific recommendations.
  • These recommendations could become an agenda for all Voluntary Organizations, Planning Commission, state governments and national Ministries. Efforts are also needed to further disseminate the information about the policy and its intentions with small voluntary organisations as well as government functionaries.
  • There is a need to solicit commitment from state governments and national ministries. A systematic intervention is also needed to get National Policy approved and adopted by the Indian Parliament. The most serious challenge faced by India today is the conflict between violent and non-violent approach of development.
  • Needless to say that majority of population of India is still deprived of basic fruits of development, but rather than adopting the approach which is more inclusive and look for solutions within the constitution. India is faced by disturbances in many parts of the country. This not only hampers the development projects but also shrink the space for people’s participation to achieve their goals through peaceful means.
  • The voluntary sector being present in such locations faces the challenge of delivering the services and even mobilizing people on the development agenda. The need of the hour is to work closely with each other for the benefit of the marginalized people as even today the dream of Mahatma Gandhi has not been achieved.