A confrontation may be brewing between the Indian government and foreign-funded non-governmental organizations (NGOs). A report by the Intelligence Bureau (IB), India’s internal intelligence agency, alleged that Greenpeace and other lobby groups were hurting the country’s economic progress by campaigning against power projects and mining.

The 21-page classified report was prepared for the top levels of India’s new administration, but was recently leaked to the media.

"A significant number of Indian NGOs funded by donors based in US, UK, Germany and Netherlands have been noticed to be using people-centric issues to create an environment, which lends itself to stalling development projects," the report claimed, according to Reuters.

In response, Greenpeace denied it was trying to block economic growth, claiming it stood for ‘sustainable development’. It alleged that the report was an attempt to silence dissent.

“We believe that this report is designed to muzzle and silence civil society who raise their voices against injustices to people and the environment by asking uncomfortable questions about the current model of growth," Greenpeace claimed in a statement.

The report has been leaked at a time when India’s sluggish economy has completed a second year of sub-5% growth, the slowest in over a decade. Prime Minister Narendra Modi, who took office in May, won a clear mandate with his promise to deliver development and jobs for millions of youth.

The new administration has been looking at ways to jump-start the economy by reducing red tape in foreign investment and implementing projects that have been approved.

Several large industrial projects were stalled under the previous Congress government because of local opposition, environmental hurdles, and difficulties in acquiring land.

Foreign-funded NGOs have reportedly been involved in protests against coal-fired power projects, steel and aluminium refineries, as well as the Kudankulam nuclear plant in Tamil Nadu.

According to the IB report, the cancellation, disruption or delay to these projects had knocked 2 to 3 per cent off India’s annual growth rate.

It alleged that Greenpeace was leading a “massive effort to take down India's coal-fired power plant and coal mining activity” by using foreign funds to “create protest movements under 'Coal Network' umbrella at prominent coal block and coal-fired power plant locations in India”.

According to the Press Trust of India (PTI), the IB report claimed that Greenpeace had received 450 million rupees ($8.2 million) in foreign funding in the last seven years.

In its statement, Greenpeace said that instead of destroying India's forests to mine coal, the government should embrace renewable energy and energy efficiency to meet the country’s energy needs.

The IB report also claimed that six NGOs were behind the anti-GM (Genetically Modified) protests in India and these groups received most of their funding from Germany.

The total amount of overseas funds that NGOs receive is substantial. Rediff.com reports that 22,735 NGOs in India received 103.3 billion rupees ($2.3 billion) from foreign donors in 2010-2011.

An earlier report by the Ministry of Home Affairs in December 2013 said the NGO sector was vulnerable to money laundering and terrorist financing.

Following the IB report, the Ministry served a show cause notice to Greenpeace on Friday asking why its permission to receive foreign funds under the Foreign Contribution (Regulation) Act should not be withdrawn. According to The Economic Times, ten more NGOs may receive similar notices.

This latest focus on NGOs may be seen as yet another example of India’s infamous bureaucracy at work, trying to be seen as proactive by an incoming administration. Or it may be a signal that foreign-funded NGOs could face greater scrutiny in the future if they campaign against projects that are seen to be economically vital.

- Karan Singh