Saturday, June 25 2005 18:33 Hrs (IST) - World Time -

New Delhi: Finance Minister P Chidambaram today (Jun 25, 2005) pitched for effective regulation of funds from abroad to NGOs, as unreported flow was fraught with serious security and economic risks.

There are 30,000 organisations registered under Foreign Contribution Regulation Act (FCRA), but only 16,000 reported the flow of foreign funds, which amounted to Rs 5,000 crore annually, Chidambaram said in his valedictory address to a two-day seminar on FCRA.

If 16,000 organisations accounted for Rs 5,000 crore, an equal amount must be going unreported, he said, adding this had serious security and economic implications.

The seminar came days after the Government decided to set constitute a Group of Ministers (GoM) to overhaul FCRA as it had failed to check the overseas funding of anti-national organisations.

"Accounting of such flow of funds should not be construed as intrusive or invasive," he said, adding this has become necessary, as 50 per cent of NGOs do not report the money received by them.

Admitting that some of NGOs are doing yeoman service to the country, Chidambaram said accounting and reporting of the money received was very important, particularly in the era of globalisation.

Two decades ago, the flow of funds were usually in public accounts as they were from Government to Government. Now things have changed as majority of funds were private capital flows.

It was therefore necessary that these capital flows were carefully regulated, he said.