We see this process as at least a means to clean up the list of NGOs, where many 'briefcase' NGOs exist. In a way, it is a good step to clean up the list and then have a better look at those who are registered. As such we don't consider it negative.
Some people registered as NGOs hoping to get funding and the vast majority of them never de-registered and remain on the list of NGOs. They had nothing more than a business card.