The Foreign Contribution (Regulation) Amendment Bill, 2020 was introduced in Parliament on 20 September and was passed by both the Houses within the next 72 hours. There was no referral to a select/standing committee. NGOs in India are both aghast and distraught at these amendments. VANI (Voluntary Action Network India), an apex body of Indian voluntary development organisations, has dubbed the bill as a “death blow to the development relief, scientific research and community support work of the NGO community”. It accuses the bill as one that “throttles the spirit of cooperation that had been ushered in earlier this year by the positive role played by development organizations in mitigating the lockdown and COVID-19 pandemic by virtually making it impossible for NGOs to function”.
As of 2016, there were 33 lakh NGOs operating in India. As of 2019, just 22,000 (less than 1%) registered themselves under the FCRA and received foreign funds. 98% complied with the government mandatory regulations. Before this Bill was introduced, the foreign funding of NGOs was regulated by the Foreign Contribution (Regulation) Act 2010 (FCRA 2010). It has been amended twice. The first amendment was made by Section 236 of the Finance Act, 2016 and the second by Section 220 of the Finance Act, 2018. What was the need to amend the FCRA 2010 and why are NGOs crying foul over the new curbs on their functioning?
NGOs As Watchdogs
To understand why the government is tightening the noose around the NGOs that receive foreign funding, one will have to discern between the various types of NGOs. One kind (one may call them plain vanilla) is the typical or traditional development NGO that directly engages with the public, goes to villages and tribal areas. It does fundamental development work related to health, education, implementing government schemes, etc.
The other type of NGOs is the ‘Activist NGOs’. For them, the government has to be confronted if it digresses from the path outlined by the Constitution or if they do not discharge their duties diligently. The activist- NGOs demand transparency. They want rights to be awarded/restored to the voiceless and underprivileged. They typically ‘oppose government policies they perceive to be anti-people or undemocratic and take recourse to litigation, agitation and/or media expose’. Naturally, no responsive government will encourage and tolerate this antagonism and aggressive accountability. The government says that the amendments are required to regulate funds that it feels is being used for ‘activities that are detrimental to national interests’. The government says that foreign funding of NGOs doubled between 2010 and 2019 and it was forced to cancel the registration of more than 19,000 NGOs for lack of compliance to the mandated requirements.
TIGHTENING REGULATIONS
Some of the amendments in FCRA 2020 prohibit election candidates, editor or publisher of a newspaper, judges, government servants, members of any legislature and political party from accepting foreign contribution in any form, be it cash, security or article beyond a certain value. Others like public servants (including any person who is in service or pay of the government or remunerated by the government for the performance of any public duty) too cannot enjoy the benefit of foreign funding.
An important amendment is the introduction of the requirement of Aadhaar documents to be submitted by NGOs of all its office bearers or Directors or other key functionaries. A new requirement states – “Every person who has been granted certificate or prior permission under section 12 shall receive foreign contribution only in an account designated as “FCRA Account” by the bank, which shall be opened by him for the purpose of remittances of foreign contribution in such branch of the State Bank of India at New Delhi, as the Central Government may, by notification, specify in this behalf”.
Another example of the tightening of screws is related to an NGO transferring funds to smaller, feeder NGOs to carry out the legwork or fieldwork required for implementing the projects or daily tasks. The amendment says: “No person who (a) is registered and granted a certificate or has obtained prior permission under this Act; and (b) receives any foreign contribution, shall transfer such foreign contribution to any other person.” Earlier, recipients of foreign grants could use 50% of the contribution for meeting administrative expenses. The FCRA 2020 caps this at 20%. All these amendments are bound to impact NGOs negatively.
LIKELY OUTCOME OF NEW CURBS
According to the ICJ (International Commission of Jurists), an international NGO that defends human rights, “the legislation fails to comply with India’s international legal obligations and constitutional provisions to respect and protect the rights to freedom of association, expression, and freedom of assembly. It would impose arbitrary and extraordinary obstacles on the capacity of human rights defenders and other civil society actors to carry out their important work.”
ICJ Legal and Policy Director – Ian Seiderman said: “The Bill has been passed by both Houses of Parliament only four days after it was tabled, and without any stakeholder consultation. This hasty lawmaking that clearly undermines human rights and the work of civil society is yet another attempt by the government to destabilize the functioning of democratic institutions in India. The spirit of the Bill is to stigmatize certain NGOs and lend credence to the authoritarian voices that have attacked them as “anti-national”. The unfortunate result is that many civil society organizations will be chilled from seeking or accepting scarce funds from the largest pool of donors even in cases where it is not clear whether they would be running afoul of the FCRA. These resources are also vital to maintaining the independence of the work of NGOs.”
In an editorial (2 October) the Indian Express said – “On Tuesday, India joined Russia in an ignoble league – of nations from which the global human rights organization, Amnesty International, has ceased operations. That Amnesty claims it was forced to shut shop because the Enforcement Directorate has frozen its accounts while the Union Ministry of Home Affairs accuses the outfit of financial impropriety only speaks of the acute trust deficit between civil society groups and the government. The FCRA is an Emergency-era law – in its 1976 avatar, it was used to “regulate” foreign funding of political parties, electoral candidates, judges, newspaper publishers, cartoonists. By deploying the false binaries of development vs environment, civil rights vs national interest, the Centre has increased its stranglehold on civil society activism.”
HAJJ AND IT RETURN
A week back, news appeared that a new Income Tax Rule has made it mandatory for furnishing of returns mandatory for foreign visits, which cost over Rs 2 lakh, including pilgrimages. This will create an additional burden on Hajj pilgrims and discourage many from going to Hajj. The CEO of the Hajj Committee has approached the Ministry of Minority Affairs, which has taken a sympathetic view of the issue.
According to media reports, the ministry has in turn approached the finance ministry and hoped to get an exemption as it was done previously for Hajj and Mansarovar Yatra in 1998. The plea of Hajj tour operators seems reasonable. They say that most Hajj pilgrims do not go for Hajj for pleasure to splurge their ill-gotten wealth earned by evading tax. Rather, for most Hajj pilgrims the Hajj expenses are their lifelong savings accumulated over a considerable period. The issue has not yet received considerable media publicity and will hopefully be resolved amicably.