Foreign Donations to NGOs and FCRA : Daily Current Affairs

Relevance: GS 2: Development processes and the development industry —the role of NGOs, SHGs, various groups and associations, donors, charities, institutional and other stakeholders.

GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development; Role of external state and non-state actors in creating challenges to internal security.

Key Phrases: FCRA, NGOs, voluntary organisations, foreign donations, suspension and cancellation of FCRA Licenses, civil liberty and human rights groups, filing annual returns, Internal Security and Sovereignty, Impact on economic development.

Why in News?

The Union Home Ministry on Monday said that the FCRA renewal application of Missionaries of Charity (MoC) was refused on December 25 for not meeting certain eligibility conditions.

Keypoints:

Recent moratorium on foreign donations to another prominent organisation, Commonwealth Human Rights Initiative (CHRI), has once again raised question marks on the powers of suspension under key provisions of the Foreign Contribution Regulation Act (FCRA) 2010.
There have been a slew of cancellations or suspensions of FCRA licenses of prominent civil liberty and human rights groups, including Amnesty International, The Lawyers Collective, Greenpeace India and The Ford Foundation.
The Home Ministry has so far granted FCRA licenses to over 20,000 organisations. In March 2020, the Government informed Lok Sabha that over a three-year period, the licenses of 6,676 organisations were cancelled. No figures were given for suspensions.
A scrutiny of recent FCRA orders shows that the suspension route is being increasingly used by the Union Home Ministry’s FCRA Monitoring Cell despite a 2013 Delhi High Court order that quashed the suspension of another civil liberties group, Indian Social Action Forum (INSAF).
- 2013 Justice V K Jain judgement in the INSAF case states that “such reasons (the alleged irregularities) cannot be given by way of extraneous evidence at a later stage. In the absence of reasons, it would not be possible for the organization to challenge the suspension”.

FCRA or Foreign Contribution (Regulation) Act, 2010 regulates foreign donations and ensures that such contributions do not adversely affect internal security.

First enacted in 1976, it was amended in 2010 when a slew of new measures were adopted to regulate foreign donations.
The FCRA is applicable to all associations, groups and NGOs which intend to receive foreign donations.
- It is mandatory for all such NGOs to register themselves under the FCRA.
- The registration is initially valid for five years and it can be renewed subsequently if they comply with all norms.
- Registered associations can receive foreign contribution for social, educational, religious, economic and cultural purposes.
- Filing of annual returns, on the lines of Income Tax, is compulsory.
In 2015, the MHA notified new rules, which required NGOs to give an undertaking that the acceptance of foreign funds is not likely to prejudicially affect the sovereignty and integrity of India or impact friendly relations with any foreign state and does not disrupt communal harmony.
- It also said all such NGOs would have to operate accounts in either nationalised or private banks which have core banking facilities to allow security agencies access on a real time basis.
Members of the legislature and political parties, government officials, judges and media persons are prohibited from receiving any foreign contribution.
However, in 2017 the MHA, through the Finance Bill route, amended the 1976-repealed FCRA law paving the way for political parties to receive funds from the Indian subsidiary of a foreign company or a foreign company in which an Indian holds 50% or more shares.

Highlights:

According to provisions of Section 13 in the Act, MHA on inspection of accounts and on receiving any adverse input against the functioning of an association can suspend the FCRA registration initially for 180 days.
- Until a decision is taken, the association cannot receive any fresh donation and cannot utilise more than 25% of the amount available in the designated bank account without permission of the MHA.
- The MHA can cancel the registration of an organisation which will not be eligible for registration or grant of ‘prior permission’ for three years from the date of cancellation.
Against CHRI, the Ministry has also invoked Section 14(d) of the FCRA Act, which states that the FCRA certificate could be cancelled for violating “any” rule or provision of the Act.

Government Stand:

In an official statement, the Centre revealed that the Missionaries of Charity’s renewal application under the Foreign Contribution Regulation Act (FCRA) was refused on December 25 after it failed to meet the eligibility conditions under FCRA 2010 and FCRR 2011.
- No request or a revised application had been sent by the missionaries after the refusal.
In the case of CHRI, the Home Ministry has cited “multiple violations”, which include technical provisions such as utilisation of funds not filled in prescribed forms and non-intimation of two bank accounts where foreign contributions have been deposited.
A 2014 report by Intelligence Bureau identified several foreign-funded NGOs that are “negatively impacting economic development”.
- The negative impact on GDP growth is assessed to be 2-3 per cent per annum.
- Some “Anti-development” activities includes a campaign against palm oil imports from Indonesia and disposal of e-waste of Indian IT firms, organising construction workers in urban areas, protests against identified projects such as Gujarat’s Special Investment Regions, Par Tapi Narmada River Interlinking Project and the Delhi-Mumbai Industrial Corridor.
- The report says that while caste discrimination, human rights and big dams were earlier chosen by international organisations to discredit India at global forums, the recent shift in the choice of issues was to encourage “growth-retarding campaigns” focused on extractive industries, genetically-modified organisms and foods, climate change and anti-nuclear issues.
- According to the report, the funding for such campaigns came from foreign donors under charitable garb.

Conclusion:

There is an undeniable role of NGOs and voluntary organisations in national development and “genuine NGOs need not shy away from any regulatory compliance mandated under the Act.”
Foreign contributions, considering their nature and vast expanse of abuse, are a tightly regulated and controlled means and that it is well within sovereign right to make changes to effectively regulate them.

Source: Indian Express

Mains Question:

Q. Regulation should not hamper the working of NGOs, which are an important part civil society. Critically Analyse.