Stifling Regulations

Amendments to FCRA must not be used as an instrument to harass activist organisations in the name of transparency

AuthorPublished: 26th Sep 2020  12:34 am

The latest amendments to the Foreign Contribution (Regulation) Act (FCRA) could have a major impact on the functioning of non-governmental organisations in the country. The mandatory requirement of Aadhaar cards for the promoters, a 20% cap on the use of foreign funds for administrative expenses, ban on re-granting FCRA funds to other organisations and parking the funds in a State Bank of India branch are among the key changes set to come into force. The amendment Bill was hurriedly passed in Parliament amidst the opposition boycott. A thorough discussion and scrutiny of the provisions by the members could have helped in addressing some of the genuine concerns of the NGOs and civil society organisations that benefit from foreign charities and donors. There is no doubt that the activities of the NGOs receiving foreign funds need to be regulated to ensure transparency and proper utilisation of the funds to meet the original objectives of the donor organisations. There has been criticism that some of the organisations indulge in questionable activities and misuse the funds. However, an overwhelming majority of the NGOs make genuine contributions to society for its betterment. The work of civil society organisations during the ongoing Coronavirus pandemic in saving countless lives bears out this fact. Such initiatives should not become victims of the stifling regulations and harassment by authorities in the name of transparency and compliance to rigid norms. There is a growing tendency among the authorities to use the FCRA as an instrument to harass political rivals and activist organisations such as Amnesty International.

A wide range of organisations, from environmental activism to religious activities, had come under the scanner of the government in recent years. However, according to the government’s FCRA dashboard, there are 22,447 active FCRA registrations in the country. In 2018-19, 21, annual compliance reports were filed by 21,915 organisations, amounting to a compliance rate of 97.6%. The proposal to expand the power of the Home Ministry to cancel any FCRA certificate for more than 180 days is an arbitrary move. The proposed ban on transfer of foreign contributions to other organisations will discourage coordinated initiatives between international funders and the local intermediary organisations. For international funders without a local presence in India, the intermediary organisations enable their funding to reach smaller, less visible organisations by providing due diligence in the selection, monitoring and capacity building of grassroots NGOs. The ban on regranting will force these funders to focus on supporting only a few large organisations, further disadvantaging the rural, grassroots groups and those working with the marginalised communities. It will also hamper contributions from India’s diaspora whose members rely on intermediary organisations to help identify NGOs they can support.


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