Public money must serve the public, not private ends

Why charitable and religious trusts handling vast sums must face higher accountability, not lower scrutiny

Charity, whether religious or secular, is not private wealth in disguise. When citizens donate money, and when the State grants tax exemptions, both acts rest on one shared assumption: the funds will be used for a declared public purpose. Once that social contract exists, accountability is no longer optional.

India today hosts one of the world’s largest ecosystems of charitable, religious, educational, and philanthropic institutions. The scale is immense. There are lakhs of registered trusts, societies, and Section 8 companies operating across the country. Under the Income Tax framework, more than 3 lakh entities have historically sought or obtained charitable registration or approval under various provisions over time.[cite:41] The Ministry of Home Affairs has also regulated tens of thousands of organizations under FCRA, many of which have received foreign contributions amounting to thousands of crores annually in several reporting years.[cite:39][cite:46]

Alongside this, India’s major religious institutions individually manage extraordinary resources. Temples such as Tirumala Tirupati Devasthanams, Shree Siddhivinayak Temple, Vaishno Devi Shrine, churches, waqf institutions, gurudwaras, mutts, and countless regional trusts collectively oversee donations, land banks, gold holdings, rental income, educational institutions, hospitals, and social assets worth many thousands of crores. Some individual institutions report annual receipts comparable to mid-sized corporations.

That changes the conversation entirely.

The issue is no longer whether such bodies are “religious” or “charitable.” The issue is whether institutions handling public-trust money at this scale can claim exemption from the standards expected of any entity entrusted with public resources.

They should not.

When Rs 100 is donated by a poor citizen, it is an act of faith. When Rs 100 crore is accumulated through lakhs of such donations, it becomes a fiduciary responsibility. When tax exemption protects that corpus from ordinary taxation, the public itself becomes an indirect stakeholder.

This is why the public has every right to ask:
· How much money was received?
· From whom and through what channels?
· How much was spent on genuine charitable or religious purposes?
· How much remains idle or excessively accumulated?
· Were contracts awarded transparently?
· Were trustees or connected persons unjustly benefited?
· Were assets used for declared objects or private advantage?
These are not anti-faith questions. They are pro-integrity questions.

Indian law already recognises this principle. Tax exemptions for charitable and religious bodies are conditional, not absolute. Benefits are tied to application of income for approved purposes, maintenance of books, audit compliance, and avoidance of private benefit. [cite:43][cite:47] Where foreign contributions are involved, FCRA imposes even stricter standards of traceability and object-based utilisation.

That is precisely how it should be.

Because opacity breeds’ abuse. Across jurisdictions, scandals involving trusts often involve familiar patterns: diversion of funds, insider contracting, excessive salaries, real-estate misuse, political funding through proxies, or wealth concentration under sacred branding. Honest institutions suffer reputational damage when dishonest ones hide among them.

India must therefore move toward a higher accountability model for all large trusts and religious bodies handling significant public funds:
· Mandatory public annual disclosures in simple language.
· Independent professional audits with rotation.
· Related-party transaction transparency.
· Digital donation traceability above thresholds.
· Corpus utilisation reporting.
· Public dashboards for institutions crossing asset or receipt limits.
· Strong penalties for diversion and trustee misconduct.
None of this attacks religion. None of this undermines charity. It protects both.

The small devotee placing coins in a hundi, the family donating to a hospital trust, the NRI contributing to relief work, and the taxpayer subsidising exemptions through foregone revenue all deserve the same assurance: that public-purpose money remains public-purpose money.

India must never confuse sanctity with immunity. A temple, church, mosque, gurudwara, mutt, NGO, or charitable trust may command respect - but respect is not a licence for opacity. If money is collected in the name of society, it must serve society. If tax relief is granted in the name of public good, the public has every right to demand accountability.

That is not intolerance. That is justice.
CA. M R RANJIT KARTHIKEYAN | ranjit@rkaglobal.com