Curb on Foreign Funding of NGOs

• 21 Sep 2021

Why in News

Recently, the Union Government has put restrictions on funding for 10 international Non-Governmental Organisations (NGO’s) working on Child Rights, Climate Change and environmental projects.

• In February 2021, the Ministry of Home Affairs (MHA) issued new regulating guidelines to banks under Foreign Contribution (Regulation) Act, 2010.

Key Points

• About:
  
  • The Reserve Bank of India had previously asked for several foreign organisations to be put on the Prior Reference Category (PRC) list.
    
    • It implies that as and when the foreign donor wants to transfer the money to some recipient association in India, the same needs prior clearance from the Ministry of Home Affairs.
  • Over 80 international agencies are on the list.
• Provisions Under FCRA Amendment, 2020:
  
  • It requires any organisation that wants to register itself under the FCRA to have existed for at least three years and to have spent a minimum of Rs 15 lakh on its core activities during the last three financial years for the benefit of the society.
  • The NGOs are also required to submit commitment letters from their donors, specifying the amount of foreign contributions and the purpose for which they are proposed to be given.
• Reasons for Curb:
  
  • It was stated that dozens of NGOs were indulged in outright misappropriation or misutilisation of foreign contributions.
  • Even doubling the inflow of foreign contribution between the years 2010 and 2019, many recipients have not utilised the fund for the purpose for which they were registered or granted under FCRA Act.
    
    • It has also led the central government to cancel certificates of registration of more than 19,000 recipient organisations during the period between 2011 and 2019.
• Implications:
  
  • Discouraging Constitutional Rights:
    
    • These moves will have a discouraging effect on the constitutionally guaranteed rights to freedom of association, expression and assembly (Article 19).
    • The government has expanded governmental discretion, bureaucratic control and oversight with respect to the day-to-day functioning of NGOs in India.
  • Can Curb NGOs’ Humanitarian Work:
    
    • It can choke NGOs with red tape so that they are unable to do their humanitarian work.
    • It can make it more difficult for grassroots NGOs that are independent of government, business, religion and political groups to operate in India.
  • Repressing Freedom:
    
    • The passage of the FCRA Amendment, 2020 and the actions against Amnesty place India next to only Russia, where the government has used the Foreign Agents Law, 2012 and Undesirable Organisations Law, 2015 as a weapon to repress freedom of association and expression.
    • International organisations had expressed concern over the use of the Foreign Contribution Regulation Act to “stifle the voices” of activists and non-governmental organisations in India.

Way Forward

• Excessive regulation on foreign contribution may affect working of the NGOs which are helpful in implementing government schemes at the grassroots. They fill the gaps, where the government fails to do their jobs.
• The regulation should not hamper sharing of resources across national boundaries essential to the functioning of a global community, and should not be discouraged unless there is reason to believe the funds are being used to aid illegal activities.

Source: TH