Leading NGOs Believe FCRA Changes Will ‘Kill’ Voluntary Sector

• The amendments will also hinder the sector’s ability to collaborate and conduct research, activists tell The Wire. New Delhi: The Foreign Contribution (Regulation) Amendment Bill, 2020 introduced in Lok Sabha on September 20 will severely impact collaborative research in critical fields in India as organisations receiving foreign funds will no longer be able to transfer them to small NGOs working at the grassroots level. Leading organisations also say the Bill would initially impact the livelihoods of workers associated with these small NGOs and ultimately lead to the “killing” of the entire sector as caps on administrative expenses would make it impossible for even the bigger NGOs to perform.
• The Foreign Contribution (Regulation) Act (FCRA), 2010 regulates the acceptance and utilisation of foreign contribution by individuals, associations and companies. Under this Act, according to PRS Legislative Research, certain persons are prohibited from accepting any foreign contribution. The Bill adds the category of “public servant” to it. They include any person who is in service or pay of the government, or remunerated by the government for the performance of any public duty. Also, the Bill seeks to intrdouce an amendment to the clause that says foreign contributions cannot be transferred to any other person unless that person is also registered to accept foreign contributions, by prohibiting the transfer of foreign contribution to any other ‘person’ that may be an individual, an association, or a registered company.
• It also seeks to restrict the use of foreign contributions for administrative purposes from the earlier 50% to 20%. Another key aspect is that the Bill seeks to extend the period of suspension of registration of a person by the government from the present limit of 180 days by up to an additional 180 days.
• ‘Small NGOs destroyed with one stroke’ Reacting to the proposed changes, Poonam Muttreja, executive director of the Population Foundation of India, which works on implementation of gender-sensitive population, health and development strategies and policies, said the Bill will mark the “end of any partnership.” “If you are getting foreign funding, you cannot work in partnership with anyone, you will now not be able to give the money to an individual or another NGO or collaboration partner. All large NGOs collaborate with smaller NGOs which are there at the grassroots level – they do not have the capability of raising money or writing reports but do the real work. We support them to do the real work and we raise funds and write report and support them as an intermediary organisation. So this would mean the end of the small NGOs,” she said. Stating that “all the money from the private sector is also going to just one place now – PM-CARES Fund,” Muttreja commented that in any case, for small NGOs to get Indian or international money is “very difficult”. Alliances and collaborations are crucial in the development sector, she said, saying these will now be “destroyed with one stroke”.
• Impact on research With years of experience in working with the sector as also foreign funding agencies, Muttreja said much of the NGO’s budget is for administrative purposes, especially for research. “But with the limit for expenditure under this head being reduced from 50% to 20% of the donations, we will not be able to do any research – be it international or national. We won’t be able to collaborate with universities or research institutes,” she said. She said since the NGOs have grassroots perspective, the bigger ones collaborate with academic institutions to conduct research. “This is going to get impacted due to the new limit. There must be a logic for having the limit at 50% earlier. But now it has been arbitrarily reduced to 20%.” Likewise, she said, now the government wants all the FCRA funds to come to just one bank – the State Bank of India in New Delhi. “So will it be reporting to the home ministry? Will everything be decided then? Will the home ministry now look at who is getting what money and decide if it can be released?” she asked, saying it would lead to centralisation. ‘In times of COVID-19, NGOs needed more relaxations’ Muttreja said many NGOs are leading scientific research, especially in health, and so in a time like this – when India is battling the COVID-19 pandemic and so much is at stake, international collaborations should be encouraged. “But this Bill would be an absolute model of control over and above the rules, regulation and certification processes, it would stifle this sector and the spirit of cooperation and collaboration.”
• “These amendments also assume that NGOs that are receiving foreign funds are guilty unless proven otherwise. That is the spirit behind the Bill. We are here because of the failure of the executive and government, because they do not do their jobs and we come in to fill the gaps,” she added. Muttreja said it is very difficult for NGOs to get any government funds, and now “they are also starving us of private sector money”. She added, “NGOs also have a lot of restrictions on using grant money for sub-contracting work to any foreign institution. So no Indian organisation can be a leading institution in an international consortium. But I am proud that our institutions do critical research, especially in the health sector. Yet, additional restrictions are being imposed.” “These rules, they say, are meant to control the NGOs which engage in dubious activities. There we stand with the Government of India in its efforts to put down such activities. But by failing to recognise the diversity of NGOs, which include world-class organisations that are recognised globally, they will crush their competitiveness and creativity. They want to bring us down to our knees.”