New FCRA rules leave NGOs fuming

Cancellation followed fingers being pointed at foreign funded NGOs as being responsible for the various protest movements in the country


Sreelatha Menon New Delhi
About 4,000 NGOs got their FCRA (Foreign Contribution (Regulation) Act ) 2010 registration cancelled a couple of months ago. These were part of the 38,000 odd who have FCRA registration, or the gateway to getting foreign funds, and they bring in about Rs 10,000 crore annually.

The cancellation followed fingers being pointed at foreign funded NGOs by Prime Minister Manmohan Singh as being responsible for the various protest movements in the country against national programmes. The cancellations are also the outcome of new Rules that have come into force under FCRA.

While the cancellations have been broad in their sweep including organizations like IITs, Jawaharlal Nehru University, and even publishers like Kali for Women and also many church backed groups, the biggest number was from Tamil Nadu (the scene of the ongoing anti nuclear protests) where about 700 NGOs got their funds stopped. The NGOs feel that the idea is to use the law and its new Rules to eliminate dissent without seeming to do so.

The reasons for most cancellations were technical, and concerned the new rules notified in 2011 for the FCRA Act. Most NGOs did not file their form 3 or submit their report on their expenditure by December 31 as required by the new rules.

NGOs are angry and hurt especially with a clause that almost bans dissent and protest saying these are political. And political organizations are not allowed to receive foreign funds.  

Says Mathew Cherian who heads Helpage India and was part of a study on NGOs with IRMA recently: Letters sent to NGOs returned and this also led to cancellations. There could be cases of fake NGOs here but many of them were genuine cases of addresses being changed. Besides no NGO received a notice before cancellations as the rules specify

Human rights NGOs faced the brunt of most of this action, and probably they were the real target, he says.

The new rules makes it difficult to dissent and yet receive foreign support. These classify all agitations, rail rokos, and jail bharos as political action and not allowed for NGOs. So about 30 NGOs in Tamil Nadu had their accounts frozen at the peak of the Kudankulam agitation.

NGOs are not keeping quiet either. Insaf an NGO has filed a case in the Supreme Court challenging the FCRA Rules saying that these threaten the fundamental right to association.

Says Anil Chaudhury of Insaf:'' It is the duty of NGOs to express dissent. And many of us cannot function without monetary support. If it is taken away I would just close down. So it is the best way to gag me.’’

 Pronob Sen member Planning Commission and part of a survey on NGOs done by Central Statistical Organisation, says ''When FCRA is cancelled , there must have been a violation. But NGOs are feeling that the Government is using the law to suppress those that are not in its good books. That makes them feel oppressed,’’ he says. ''But I havent seen reports yet saying that FCRA was cancelled despite the NGO having filed returns, '' he says.

Purushottaman Mulloli a veteran activist who was part of the JP movement  says that donor agencies should have been banished 15 years ago. ''Had the donor agencies left earlier, NGOs would have started looking at internal resources,'' he says.

"NGOs are fulfilling vested interests of the donor nations," he says.

A survey done by Institute of Rural Management Anand  says FCRA is an ineffective legislation as it controls only $ 2 billion which is only about 2 per cent of the total foreign funds that come into the country. So why should voluntary sector be singled out for money laundering, the study asks. Better monitoring mechanisms are required rather than curbing, it says.

Some organisations which lost their FCRA registration
  1. Catholic Health Association of India
  2. Habitat for Humanity
  3. Terres de Homes
  4. Heifer Project India Trust
  5. Hindustan Latex Foundation
  6. Jamia Milia Islamia
  7. Jawaharlal Nehru University
  8. IIT Kanpur
  9. Smile Foundation
  10. Ashoka Foundation

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First Published: Oct 08 2012 | 6:16 PM IST

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