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Ban on Direct Foreign Funding of NGOs
Jul 08, 2014

The Centre has banned direct foreign funding to NGOs operating in India unless they fulfil stringent regulatory norms and show compliance reports. This is seen as the beginning of a process to block flow of foreign aid to NGOs, which, it perceives, are engaged in stalling developmental activities in the country. As per this exercise, the Centre has cracked down on NGO Greenpeace and placed on its radars thousands of other voluntary organisations receiving foreign aid. 

The Ministry of Home Affairs has directed the Reserve Bank of India to take prior permission of the Home Ministry’s Foreign Contribution Regulation Act (FCRA) Department before clearing any foreign aid to Greenpeace from Greenpeace International and Climate Works. This directive will put on hold direct funding of this controversial NGO from abroad since each transaction has to be cleared on a case-to-case basis by the RBI.

Greenpeace International and Climate Works Foundation are the two principal international contributors to Greenpeace India Society. The RBI has been asked to direct all banks on this order. Foreign donations to the Greenpeace have been put on prior category list so that permission is taken before any money flows in for funding its activities.

In an attempt to tighten the noose around other similar NGOs, the MHA has directed that in addition to FCRA clearance, they will also have to inform the RBI in detail about the nature of foreign funds and its usage. This has been done to streamline the foreign funding process of NGOs after some deficiencies were discovered during course of scrutiny.

This instruction has come after the Intelligence Bureau filed a report to the Government putting a question mark on the role of certain NGOs, especially Greenpeace International. Though there are over two lakh NGOs working in India, this directive will affect roughly 40,000 groups.

This is not the first time a Government is making an attempt to choke foreign funding of NGOs. The UPA Government repealed the old Foreign Contribution Regulation Act in 2010 with more stringent provisions. In fact previous government during its tenure in 2012 too had blamed US-backed NGOs for blocking development work in India.

The IB report had also recommended cancellation of permission given to Greenpeace for collecting funds abroad besides reassessment of its tax compliance. The report has also listed another 12 foreign nationals who have been associated with some NGOs in their campaign against coal mines, power projects and Nuclear power plants.


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