Fund of confusion

FCRA policy should benefit from transparency

The controversy over Foreign Contribution Regulation Act (FCRA) licences points to the opaque and arbitrary nature of a policy that impacts not just non-government organisations (NGOs) themselves but civil society. It speaks volumes for the nature of the environment in which the voluntary sector has come to operate that the licences of over 6,000 NGOs lapsed on the first day of 2022; 179 had either been rejected or were under scrutiny. The reported rejection of the seven-decade-old Missionaries of Charity’s licence on the basis of a police complaint in Gujarat that the organisation was attempting to convert young girls has attracted the headlines. But many other prominent NGOs with a similarly long history in India — from Oxfam to Jamia Millia, Indira Gandhi National Centre for the Arts, and India Islamic Cultural Centre, among others — no longer have the FCRA licence. It is striking that as many as 5,789 organisations of the 18,778 whose licences were expiring on the midnight of December 31, 2021, had chosen not to renew them, Oxfam being one of them.

Governmental hostility to the NGO sector is not special to this administration. Under the United Progressive Alliance government, the FCRA regime grew more stringent, especially as vociferous local protests over the Kudankulam nuclear power plant gathered momentum. In 2010, the Act was amended to introduce a raft of new measures to regulate foreign donations, setting the tone for the next administration. In 2015, the Ministry of Home Affairs notified new rules that required NGOs receiving foreign funds to give an undertaking that they would not harm the sovereignty or security of India, or impact friendly relations with another state, or disrupt communal harmony in India. To this expansive proviso came an even more restrictive set of rules in 2020 that raised reporting requirements and tightened the registration process, severely restricting the mechanics of fund utilisation by NGOs receiving foreign money.

It is no surprise, perhaps, that the number of NGOs in India has halved since 2020. Ironically, since 2017, this widening scope for arbitrary scrutiny has excluded the most pervasive NGOs in Indian society — political parties. Their bonanza came via an ingenious retrospective amendment to the law that enabled political parties to receive funds from an Indian subsidiary of a foreign company or a foreign company in which an Indian has a 50 per cent shareholding. The immediate context was Vedanta’s contribution to both the Congress Party and the Bharatiya Janata Party between 2004 and 2012, which the court had ruled illegal and which the law subsequently overturned in a rare display of amity between the opposition and the ruling parties.

It is nobody’s case that all NGOs are unimpeachable models of governance and probity, but the opaque manner in which scrutiny has been applied so far points to a degree of cherry-picking by the government of organisations that may be critical of it. Streamlining the FCRA regime would have been unexceptionable if the government were to come out with a clear policy that articulates the dos and don’ts and marks out the sectors in which foreign funding would be accepted and on what terms, just as it does for foreign direct investment. This will increase transparency and allow NGOs to work freely.