Choking NGO sector with the FCRA amendment

Elsewhere, other NGOs have reached out with medical aid, and provided PPE suits to struggling government doctors.

Published: 04th October 2020 07:21 AM  |   Last Updated: 04th October 2020 07:36 AM   |  A+A-

The PM CARES Fund has received exemptions from compliance with FCRA provisions

The PM CARES Fund has received exemptions from compliance with FCRA provisions (Express Illustrations | Tapas Ranjan)

In all the hurly burly of the passage of the 3 farmers bills, and the all-India protests that followed, the important changes brought in by the Foreign Contribution (Regulation) Amendment Act, 2020 have been buried. The amendment is an attempt to choke the free functioning of NGOs. More worrisome is the legislation reflects the present regime’s deep suspicion of private intervention in development work.

It is perhaps the pandemic that has best brought out the importance of private, collective intervention as the first line of defense, much before the lumbering government machinery reaches those in need. In the early months of total lockdown in Mumbai, an NGO - Mumbai First - reached food kits to over 2 lakh families whose breadwinners were without a job. Elsewhere, other NGOs have reached out with medical aid, and provided PPE suits to struggling government doctors.

The government’s main reasoning for straight jacketing civil players is: first, to achieve greater accountability through elaborate monitoring, and second, stymieing ‘misuse’ of funds for suspect, anti-national activity. On accountability, the unamended act is as it is a piece of over-regulation. Every, foreign donation has to be reported, and failure to file regular returns can result in summary cancellation of the FCRA certificate, and thereby access to foreign funds.


The bigger issue is the ‘misuse’ of funds. The government’s case is that international money is being funneled into the country in the name of development; but diverted for religious conversions and to whip up anti-government protests.The most immediate ‘victim’ of this line of thinking is Amnesty International, whose bank accounts were frozen on 10 September for violations of the FCRA provisions. Soon after, the organization announced it was shutting its operations in the country. 

A look at the 3 or 4 main provisions of the amended act shows it is directed to make the functioning of non-governmental organizations as difficult as possible by squeezing them where it hurts. First, it bars an NGO from redistribution of its funds to other organizations, even if they are FCRA compliant. NGOs for years have functioned as networks, with smaller ones being supported by the larger, better-funded organizations. Without this networking option, many of the smaller ones will find it difficult to survive.

Second, the amendment has brought down the permitted spend on ‘administrative’ expenses to 20 per cent of receipts from the current level of 50 per cent. Vital areas like research, and setting up strategy teams will now be a no-no. More perturbing is a new provision where all foreign-funded NGOs have to bank with a single State Bank of India (SBI) branch in New Delhi, presumably to allow for strict monitoring. What was the need for this? Tracing bank details of every foreign transfer in a digital age is hardly a problem.
Public servants now cannot be part of organizations that receive foreign funds. The Act also gives the Ministry of Home Affairs (MHA) powers to suspend FCRA certificates for more than 180 days, without specifying an upper limit. 


What stands out starkly is the double standards of government. The PM CARES Fund has received exemptions from compliance with FCRA provisions, even though the Fund is headed by the Prime Minister, has several Cabinet ministers as trustees and is administered by officials from the PMO’s office.

Again the biggest NGOs - the country’s political parties - are running establishments that are not accountable to anyone. Electoral bonds, legalized in January 2018, are an instrument to raise funds for political parties where donors can buy bonds cashable only by the receiving party. The system is completely opaque as the donors remain anonymous. No surprise again, of the Rs 2,772 crore raised over 2 years, the ruling BJP cornered 95 per cent of the funds.

In FY2019, there were 22,447 NGOs registered under the FCRA Act, of which nearly 98 per cent complied with the filing of returns. This is not to say that these organizations have unblemished records. NGOs have been fronts of racketeers engaged in siphoning off funds meant for public causes. There have been documented histories of foreign spies working through missionary organizations in border areas. But we cannot tar them all with the same brush.

There are hundreds of NGOs working to bring primary education and health to tribal children, areas where no government official has bothered to reach. There are those in urban transportation, giving inputs to state governments. And there are many vital economic activities like water conservation, and the environment, serving as the eyes and ears of civil society. Those that fund them exercise oversight to ensure the funds are properly used. An overbearing government is not welcome as an additional policeman.They funnel private energy and funds into vital areas of social and economic life, and make democracy more vibrant. Wasn’t it Prime Minister Narendra Modi who said - ‘Minimum Government, Maximum Governance’.

India Matters


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