The organisations include well known human rights, anti-nuclear and environmental organisations.
The government argues foreign-funded NGOs have fomented protests against a number of development projects, damaging India's national economy.
Reporter: As Murali Krishnan
Speakers: Jagori Dhar, Greenpeace; Eenakshi Ganguly, director, Haq; Nandikesh Sivalingam, forest campaigner
KRISHNAN: Over a dozen NGO's have been sent notices by the Home Ministry asking them to explain their funding and spending pattern as a "stricter fund monitoring" regime is expected to kick in.
Many of these NGOs facing the heat include those opposing genetically modified organisms, well-known environmental and anti-nuclear groups to little-known localised outfits.
Some of these organisations fear a clampdown under Prime Minister Narendra Modi's government for campaigning on environmental, land rights or anti-nuclear issues.
Eenakshi Ganguly, director of Haq, a child rights NGO explains.
GANGULY: It is a worrying scenario
that is very very clear. In a democracy there has to be a space for dissent. If there is no dissenting voice, there is no democracy. This is a way to gag the messenger and not the message. The message is that there has to be someone who has to speak up for people who are disempowered and disenfranchised. And if you are going to gag that, then the voice of the disenfranchised is gagged. So basically they are gagging the whole debate around anything they don't want to listen to.
KRISHNAN: Greenpeace, a NGO working on environment issues, has been in the centre of controversy with an Intelligence Bureau report indicting it for fuelling anti-nuclear agitations and adversely affecting the Indian economy.
Jagori Dhar is a spokesperson from Greenpeace.
DHAR: Because the way we run our campaign in India, we are taking up issues not raised by others, we are taking up grass-roots level fights where we are only empowering local communities about their rights that are guaranteed under the constitution of this country and all we are doing is making people aware of their rights. It seems the government is shaken, they are scared by the work Green peace is doing.
The NGOs on the government's radar include Greenpeace, Catholic Organisation for Relief and Development Aid or Cordaid, Action Aid, Amnesty International, Survival International, National Alliance of Anti-Nuclear Movements, People's Movement Against Nuclear Energy.
According to the government, various organisations, including NGOs, in India received approximately 1.96 billion US dollars in 2012-13 as foreign donations from 164 countries.The data were provided by minister of state for home affairs Kiren Rijiju in parliament.
Nandikesh Sivalingam, a forest campaigner sees a disturbing trend.
NANDIKESH: So what are the NGOs asking? We ask the government to save our forests, save our tribal people, save our farmers from Monsanto and others. So how is this anti-people? The economy is for everybody. Everyone should be part of the economy and benefit from it. So if it is only befitting one set of the people like the corporations, how is it that it is right? That is what we are asking. So how is it that wrong? How is that anti-development, that is our question?
KRISHNAN: Government spokespersons refused to comment on the issue.
The home ministry's report makes the claim that India's annual GDP growth rate fell by 2 to 3% because of NGO campaigns between 2011 and 2013.
But it does not assess the impact of grassroots campaigns in relation to other factors that impacted the political economy - the policy paralysis in government, the corruption and mismanagement, and judicial scrutiny.
Ms Ganguly again.
GANGULY: Look at the new land acquisition bill which makes it easy for corporates to get land. Why? Development to be sustainable has to inclusive of all. It cannot be at the cost of one group of people against the other. It is not as of all of us are against development. We want roads, we want development, and we want people to have rights, better facilities, basic amenities... It cannot be for some at the cost of others.
KRISHNAN: NGOs are clearly worried. How this controversy plays out will be keenly watched.