The Complex Relationship Between NGOs, the State, and Civil Society

Across India, millions of organisations work in the gaps that government programmes leave behind, from running schools in remote villages to fighting court cases for forest dwellers. These non-governmental organisations (NGOs) sit at the meeting point of two powerful forces: the state, with its authority and resources, and civil society, the space where citizens come together around shared concerns. The relationship between these three is neither purely cooperative nor purely hostile. It is a constant negotiation of power, trust, money, and legitimacy. Understanding how NGOs, the state, and civil society interact reveals a great deal about how democracy actually functions on the ground.

Defining the three actors
What is civil society?
What is the state?
Where do NGOs fit?
NGOs as partners of the state
Filling the gaps the state cannot reach
Piloting solutions and building models
Mobilising communities
NGOs as critics and watchdogs of the state
The watchdog function
Shaping landmark legislation
A relationship of both contestation and collaboration
The tensions that limit NGO independence
Dependence on funding
The FCRA and the squeeze on foreign funds
Self-censorship and shrinking space
Accountability within NGOs
Striking the balance

Defining the three actors

Before examining how they relate, it helps to be clear about what each term means.

What is civil society?

Civil society is the arena of organised collective action that exists between the family and the state, driven by citizens themselves rather than by government command or the profit motive. It includes a diverse array of bodies such as NGOs, community groups, professional associations, trade unions, faith-based organisations, and social movements. These entities operate independently and pursue public interest goals. The idea has deep roots: the very phrase traces back to the Roman societas civilis, though its meaning has shifted considerably over the centuries.

What is the state?

The state is the formal apparatus of governance, holding the ultimate responsibility for delivering development to citizens. Over the decades, through progressive interpretation of the Constitution and its laws, the meaning of development has expanded well beyond economic growth to include social justice, gender equity, inclusion, citizen awareness, and improved quality of life. Achieving this broad vision requires the state to engage constructively with society, which is precisely where NGOs enter the picture.

Where do NGOs fit?

NGOs can be understood as the operational arm of civil society. They are the organisations that translate the energy and concerns of citizens into concrete projects, campaigns, and services. The scale is enormous. India is estimated to host millions of such organisations across sectors like education, health, environment, women’s empowerment, and rural development, though most remain small and largely volunteer-driven. Legally, they register under different statutes, primarily the Societies Registration Act of 1860, various Public Trust Acts, or Section 8 of the Companies Act, 2013.

NGOs as partners of the state

The most visible side of this relationship is collaboration. NGOs frequently complement government efforts rather than oppose them, and the state has come to rely on them for reach and flexibility.

Filling the gaps the state cannot reach

Government machinery is large, rule-bound, and stretched thin. NGOs, by contrast, often possess flexibility, a genuine grassroots presence, and community trust, which lets them innovate and tailor interventions in ways a centralised bureaucracy struggles to match. This is why so many development programmes route their last-mile delivery through voluntary organisations. Where the state offers scale, NGOs offer responsiveness.

Piloting solutions and building models

One of the most underrated functions of NGOs is experimentation. They frequently test new approaches to stubborn social problems on a small scale, and successful models are later adopted or scaled up by the government. Pratham’s ASER survey reshaped how the country measures learning outcomes, while organisations like the Self-Employed Women’s Association (SEWA) organised millions of informal women workers and pushed for their labour and social security benefits. These innovations enrich the policy toolkit available to the state.

Mobilising communities

NGOs are skilled at organising local communities, raising awareness about rights and entitlements, and fostering collective action. They empower individuals, especially women and marginalised groups, to participate in decision-making and demand accountability from local governance structures. In this sense, NGOs do not merely deliver services; they strengthen the democratic capacity of citizens themselves.

NGOs as critics and watchdogs of the state

Collaboration is only half the story. The same organisations that partner with government on a welfare scheme may simultaneously challenge it on a question of rights or transparency. This dual character is the defining feature of a healthy civil society.

The watchdog function

Civil society acts as a critical pillar of ethical governance, functioning as a watchdog that scrutinises state actions and checks the abuse of power. By promoting transparency, accountability, and citizen engagement, it challenges unethical practices and empowers people to demand good governance. Tools like social audits of public schemes, public hearings, and anti-corruption campaigns are how this oversight is exercised in practice.

Shaping landmark legislation

Perhaps the clearest evidence of civil society’s power is the rights-based legal framework that activists and NGOs helped build. Campaigns led by networks of organisations contributed directly to laws such as the Right to Information Act, MGNREGA, and the National Food Security Act, which institutionalised transparency, employment guarantees, and food entitlements. The most celebrated example is the RTI movement, where the Mazdoor Kisan Shakti Sangathan in Rajasthan used the jan sunwai, or public hearing, model to expose corruption in government records and ultimately drive the passage of the RTI Act in 2005.

A relationship of both contestation and collaboration

It is a mistake to assume that civil society and the state occupy two strictly separate spheres locked in opposition. In reality, organisations stick to various levels of contestation and collaboration in between, and it is unreasonable to expect only one or the other. The same NGO may accept a government’s policy on one issue while fiercely opposing it on another, and these stances can shift over time. Cooperation is common in areas like disaster management, healthcare, and education, even as conflict persists over civil liberties and dissent.

The tensions that limit NGO independence

The promise of NGOs is real, but so are the constraints. Their flexibility and reach come with vulnerabilities that the state can, and increasingly does, exploit.

Dependence on funding

Money shapes everything. When NGOs depend heavily on government grants, they risk losing their autonomy and becoming, in effect, contractors rather than independent voices. This reliance on state funding introduces the danger that organisations lose their critical edge. The same dilemma applies to foreign funding, which has historically supported much of the advocacy and human rights work that domestic donors are reluctant to back.

The FCRA and the squeeze on foreign funds

This is where the relationship turns sharpest. The Foreign Contribution (Regulation) Act, 2010 requires every NGO receiving foreign funds to register and obtain prior permission before accepting them. Critics argue the law’s language is dangerously vague: it allows funding to be blocked when activities are deemed of a “political nature” or against “public interest” or “economic interest,” terms that are left undefined or defined overly broadly.

The 2020 amendments tightened the screws considerably. They prohibited NGOs from transferring or sub-granting funds to other organisations, made Aadhaar mandatory for registration, and reduced permissible administrative expenses. Observers warned that this would hit two groups hardest: small grassroots NGOs that survive by working with larger organisations, and bodies engaged in advocacy, policy research, and network mobilisation. The government, for its part, defended the law on security grounds, telling the Supreme Court that doubling foreign donations between 2010 and 2019 raised the risk of foreign interference in domestic affairs. The Court upheld the amendments in 2022.

The numbers reveal the cumulative effect. According to official data cited in early 2026, more than 21,900 organisations had lost their FCRA licences, often resulting in closure or severe restrictions on their work. A proposed Foreign Contribution Bill in 2026 sought to expand these controls further, including a government-appointed authority empowered to take provisional control of the assets of NGOs whose registration is cancelled.

Self-censorship and shrinking space

Heightened scrutiny produces a quieter but equally damaging effect: self-censorship. Faced with the threat of losing their licence, many organisations working on sensitive issues like human rights or environmental protection soften their criticism, which limits their effectiveness in advocacy and social change. The state has also increased its scrutiny of NGOs critical of government policy, while some activists have faced harassment, alongside the rise of large social movements like the anti-corruption agitation of 2011 and the farmer protests of 2020-21.

Accountability within NGOs

The criticism does not flow in one direction only. While NGOs demand transparency from the state, some face questions about their own accountability, including weak transparency, donor dependency, and uneven capacity. There is also a risk of politicisation, where civil society actors align too closely with partisan interests, eroding the credibility that gives them their moral authority in the first place.

Striking the balance

The future of this relationship lies in partnership rather than antagonism. A constructive path forward involves simplifying registration and compliance, diversifying funding through domestic philanthropy and corporate social responsibility, building professional capacity within organisations, and strengthening self-accountability. A vibrant civil society needs both the freedom to criticise and the trust to collaborate. When the state treats NGOs purely as threats, it loses a valuable partner; when NGOs surrender their independence for funding, they lose the very voice that makes them worth listening to.

What do you think? Should the state have the power to restrict foreign funding to NGOs in the name of national security, even if it weakens independent watchdogs? And where would you draw the line between an NGO being a partner of the government and becoming an extension of it?

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Table of Contents

Defining the three actors 🔗

What is civil society? 🔗

What is the state? 🔗

Where do NGOs fit? 🔗

NGOs as partners of the state 🔗

Filling the gaps the state cannot reach 🔗

Piloting solutions and building models 🔗

Mobilising communities 🔗

NGOs as critics and watchdogs of the state 🔗

The watchdog function 🔗

Shaping landmark legislation 🔗

A relationship of both contestation and collaboration 🔗

The tensions that limit NGO independence 🔗

Dependence on funding 🔗

The FCRA and the squeeze on foreign funds 🔗

Self-censorship and shrinking space 🔗

Accountability within NGOs 🔗

Striking the balance 🔗