NGOs (UPSC Notes)

NGOs (UPSC Notes)

NGOs (UPSC Notes)

This article deals with ‘NGOs (UPSC Notes).’ This is part of our series on ‘Governance’ which is important pillar of GS-2 syllabus . For more articles , you can click here

What are NGOs?

According to the UN, NGOs are organizations that are not part of the government & are not conventional profit businesses. In case NGOs are funded totally or partially by governments, NGOs maintain their non-governmental status by excluding government representatives from membership in the organization. 

Other Names

  1. Third Sector Organizations (TSO) 
  2. Non Profit Organizations (NPO) 
  3. Voluntary Organizations (VO) 
  4. Civil Society Organizations (CSO) 
  5. Self-Help Organization (SHO)
  6. Non-State Actors 

Types of NGOs

NGOs can be classified in two ways

  1. By level of orientation 
  2. By level of operation 

By Level of Orientation

Charitable NGOs with activities directed towards meeting the needs of poor
Service NGOs with activities such as the provision of health, family planning or education
Empowering NGOs that aims to help the poor develop a clearer understanding of the social, political & economic factors affecting their lives and to strengthen their awareness about their own potential to control their life

By Level of Operation

National E.g. YMCA and YWCA
International E.g. Save The Children Org, CARE, Ford Foundation and Rockefeller Foundation


 Not a single model 

  • Some are highly professionalized & rely mainly on paid staff.
  • Others are based on voluntary labour and are less formalized. 
  • Many NGOs are associated with the use of international staff working in developing countries, but many NGOs in both the North and South rely on local employees. 


  • Major sources of funding are membership dues, the sale of goods and services, grants from international institutions, national governments & private donations
  • Even though the term NGO implies independence from governments, many NGOs depend heavily on governments for their funds. 
  • Some NGOs, such as Greenpeace, don’t accept funding from government or intergovernmental organizations.

The Theoretical Explanation for the growth of NGOs

Two explanations of why NGOs emerged

1. Market Failure Theory

  • NGOs emerged to provide services that the public sector can’t or will not provide services for which businesses can’t get a sufficient return on their investments. 

2. Contract Failure Theory

  • NGOs are created to provide services where the parties who want them offered are not in a position to provide these services. These parties are donors or well-wishers of clients receiving services.

Note: The Right to Association is Fundamental Right guaranteed under our constitution. Forming NGOs is part of it.

Relationship between NGOs and the Indian State 

State policies have significantly influenced the formation of NGOs, e.g. government-sponsored and aided programs & provided financial assistance to NGOs. In addition, several government committees have acknowledged the need to involve NGOs in social development processes.

Initial years

  • After independence, some attention was given to the NGO sector by the central government mainly because NGOs were Gandhian in nature, and Balwant Rai Mehta Committee was constituted to look into the work of the Community Development Program. The committee recommended that more emphasis should be laid on NGOs. But after that, the next initiatives came in the 1980s.

From the 6th Five-Year Plan

  • The government increasingly recognized the NGO sector’s vital role & provided increasing levels of funding. In the past two decades, the government has increased engagement with NGOs at all levels. 

GO- NGO Interface

  • It was launched in March 2000.
  • The Planning Commission was made the nodal agency.
  • The message was clear; the government would work with NGOs for the development of India.
  • The main reason for this was State Minimalism after LPG reforms. NGOs became mediators and managers of development processes. 

Government-NGO Collaborations

  • Although social development has emerged as a significant sector in the 21st century & NGOs are a vital part of it, there is no institutionalized mechanism of collaboration between the Government & NGOs. Evolving long-term & sustainable collaboration between Government & NGOs is the need of the hour.
  • Andhra Pradesh Model: The Government of Andhra Pradesh has formed a State Level Coordination Committee consisting of NGOs & Governmental officials headed by the CM to promote coordination between the Government and NGOs. All states must learn from this.  
  • CAPART (Council for Advancement of Peoples Action & Rural Technology) & various Ministries have evolved their schemes to be implemented by funding NGOs. For example
    1. Swachh Bharat Abhiyan: In Swachh Bharat Abhiyan, the government has partnered with NGOs like Sulabh International, Gram Vikas, and WaterAid to promote awareness, build toilets, and implement sustainable sanitation practices nationwide.
    2. National AIDS Control Program (NACP): The program works closely with NGOs like HIV/AIDS Alliance and Naz Foundation to provide HIV testing, counselling, treatment, and support services. 
    3. National Health Mission (NHM): NGOs like CARE India, Child in Need Institute (CINI), and Jan Swasthya Sahyog (JSS) collaborate with the government in implementing NHM interventions. 
    4. National Skill Development Mission (NSDM): NGOs like Pratham Education Foundation, Gram Tarang Employability Training Services, and Srijan Foundation collaborate with the government to implement skill development projects.
  • NITI Ayog also wants to involve leading Civil Society Organizations & NGOs in taking forward social sector initiatives of the government.

The role played by NGOs in India 

At the international level, the NGOs have proved their mettle and NGOs like Red Cross & Amnesty International are even awarded the Nobel Peace Prize. UN has also accepted its constructive role, and some NGOs are allowed to participate in UN Agencies for their ability to reach people and spread awareness. In India, too, they are playing an important role.

Poverty Alleviation

  • 22% of the Indian population lives below the poverty line (according to Tendulkar Committee Report)
  • NGOs are involved in poverty alleviation in various ways. For example,
    • Oxfam India: It works towards reducing poverty through advocacy, research, and campaigns focused on various social and economic issues.
    • Goonj: Goonj addresses the clothing and sanitation needs of marginalized communities.

Woman’s Movement

NGOs play an important role in women’s emancipation by addressing issues of gender inequalities and promoting women’s rights. For example

  • Self-Employed Women’s Association (SEWA): SEWA is a trade union and NGO that organizes and empowers self-employed women workers in the informal economy.
  • Breakthrough India: The NGO aims to end violence against women and girls in India.
  • Women on Wings: Women on Wings collaborates with rural women artisans and entrepreneurs in India, providing them with business mentoring and market linkages.

Environment Conservation

NGOs play an essential role in environment conservation by raising awareness, implementing conservation projects, advocating for policy changes, and collaborating with local communities. For example

  1. Greenpeace India: Greenpeace focus on climate change, pollution, and deforestation by conducting research, campaigns, and direct actions.
  2. Kalpavriksh: It works with indigenous communities in environmental conservation and promotes environmental education.

Disaster Management

  • NGOs have always been at the forefront of providing recovery, relief & rehabilitation after natural calamities. The government has also acknowledged NGOs’ role in these situations.
  • For example 
    • Goonj: It is an important NGO working in disaster rehabilitation processes 
    • Center for Science and Environment (CSE): It is involved in advocacy work on resilience and disaster risk reduction.
    • All India Disaster Mitigation Institute (AIDMI): It focuses on training and building the capacity of communities and local governments.

Fight against Corruption

NGOs have played an essential role in the fight against corruption in India. For example

  • India Against Corruption: It has played an important role in the passage of many laws most important being the Right to Information.
  • Transparency International India (TII): TII works to raise awareness about corruption, promote ethical behaviour, and advocate for strong anti-corruption laws by conducting research, engaging in policy advocacy, and facilitating public campaigns to combat corruption.  
  • Association for Democratic Reforms (ADR): It works toward increasing transparency in political funding, improving disclosure of candidates’ criminal records, and promoting voter awareness. 
  • 5th Pillar: 5th Pillar is a Chennai-based NGO known for its “Zero Rupee Note” campaign. They distribute these notes to citizens, encouraging them to use them as a symbolic way to express their refusal to pay bribes.

Giving Voice to the Voiceless

  • Downtrodden people like Prostitutes, Bonded Workers, Displaced due to projects, LGBT, Undertrials etc., don’t have such power that they can make political parties hear their voices. NGOs take up their causes and give voice to the voiceless.  
  • Bachpan Bachao Andolan Bandua Mukti Morcha are important NGOs working in this sector. 

NGOs as Pressure Groups

  • Working as pressure groups, NGOs have forced governments to act on juvenile Justice, end corporal punishment in schools, anti-trafficking, environment protection, and resettlement of displaced people, to name a few. 

Civil Servants, too, work as an agent of Economic and Social Development, but they don’t have a reach to the ground level in the way these NGOs have. If these NGOs & Bureaucracy work together, they can end all the problems like Naxalism, Poverty etc., that India is facing.

Strengths and Weaknesses of NGO Sector in India


  • Strong Grassroots Links: NGOs work closely with local communities, understand their needs, and develop context-specific solutions. 
  • Ability to Mobilize Resources:  The NGO sector in India has successfully mobilized funding from domestic and international sources, including governments, corporations, foundations, and individual donors. 
  • Ability to Innovate and Adapt: The NGO sector in India exhibits a culture of innovation and has pioneered new approaches, models, and technologies to address social challenges effectively. 
  • Collaboration and Networking: NGOs in India actively collaborate, forming networks and alliances to maximize their collective impact
  • Cost-effectiveness: NGOs operate with limited resources and are adept at optimizing their expenditure.
  • Long-term commitment to the cause


  • Limited finances: NGOs are known as an independent voice, but in recent years NGOs have increased in number & range of activities, but the number of donors hasn’t increased with that pace. Hence, there is large competition for funding. It adds the risk of donors adding conditions which can threaten the independence of NGOs. Additionally, Over-dependence of NGOs on official aid has the potential to dilute their stand to speak on public issues critically.
  • Fragmentation and Duplication of efforts: Numerous NGOs working on similar issues within the same geographical areas
  • Low levels of self-sustainability: Ensuring the long-term sustainability of programs is a significant challenge due to factors such as over-reliance on donor funding, difficulty in generating sustainable income streams, and limited integration of projects with government policies.  
  • Political interference: NGOs in India sometimes face political interference, mainly when they work on sensitive issues or criticize government policies. 
  • Capable of small-scale interventions only

Accountability & Transparency Issues in NGOs

  • India has 2 Million registered NGOs, but there is an accountability & transparency problem. Their credibility is questioned because there is a lack of transparency about their finances.
  • Main Problems include
    • NGOs are registered under multiple acts in India like Societies Registration Act,1860; Indian Trust Act,1882; Bombay Public Charitable Trust Act,1950 & Companies Act. Accountability requirements of all acts differ, with some not requiring any form of annual filing. 
    • NGOs are required to register annual returns with the Income Tax department, but annual returns filed by NGOs are not subject to public disclosure. 
    • While receiving Foreign funding, NGOs only need to inform Government of India and file annual reports to Home Ministry under FCRA and no public disclosure is required.

Hence, the statutory framework doesn’t require NGOs to be accountable directly to the Public. 

  • NGOs should build and regain lost public trust through better transparency in functioning. They can adopt the following.
    • External auditing  
    • Increased Information disclosure

Obstructionist Role of NGOs

NGOs running PIL Industry 

  • NGOs are tutoring victims to seek larger compensation when some development project runs on their land. They file bogus affidavits & PILs. 

Harming Internal Security 

  • They have a soft glove and apologist attitude towards Naxalites, Insurgents & Terrorists.
  • They force the government to repeal some acts like AFSPA, which can prove dangerous in some situations. 

Try to put Animal Rights above Human Rights 

  • Resulting in Street dog/monkey menace
  • Animal Right Activists NGOs vs Inconvenience to Public Issue 

They Cherry Pick Causes on Donor Priorities 

  • Initially, Chipko Movement was a success, but NGOs failed during Bhopal Gas Tragedy because foreign donors didn’t want to raise their voices against those companies. 
  • There is a particular scene that emerges when we see funding patterns from a particular nation and issues raised by NGOs who receive this fund. French Funded NGOs are soft on Maoists, German-funded are Anti-GM Crops, and US-funded are Anti-Coal. 

Intelligence Bureau Report (2014) also brought to the forefront the obstructionist role played by Foreign Funded NGOs and the loss of GDP to the tune of 2% happening due to their protests.

Further Reforms required

  • Need to shift from Protest to Pro-action Mode: This can be achieved by ensuring a ‘think-tank’ way of functioning & also providing alternative solutions.
  • Outcome Measurement: NGOs should use outcome-based approaches to evaluate the impact of their programs. 
  • Ethical Fundraising: NGOs should adhere to ethical fundraising practices and maintain transparency in their fundraising activities. 
  • Strengthening Governance: NGOs should adopt strong governance practices, like transparent decision-making processes, independent audits, and disclosure of financial information.      
  • Collaboration and Networking: NGOs should promote collaboration and networking among themselves to share best practices, resources, and knowledge.  

On the other hand, the government should also distinguish between activist & services provider NGOs.


  • Foreign Contribution (Regulation) Act,2010 replaced FCRA,1976 
  • The Act seeks to regulate the flow of foreign funds to voluntary organizations to prevent their diversion towards activities detrimental to the national interest. 
  • NGOs have to register under FCRA to accept foreign contributions & central government can deny certification under certain conditions. 
  • Organizations must renew FCRA certification every 5 years. Dormant accounts can be weeded out using this provision.
  • NGOs can receive these foreign contributions only through designated banks ( New Delhi Branch of SBI).
  • Further, the NGO has to report to the central government any foreign contribution within 30 days of its receipt, in addition to filing annual reports.
  • If any organization receive a foreign contribution of over ₹10 lakh in an instance, the bank concerned would immediately inform the government so that the source of such fund can be tracked. 
  • NGOs cant spend beyond 20% of their foreign funding on Administrative expenses. 

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