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NGOs unhappy with new foreign contribution law

Sreelatha Menon  |  New Delhi 

The passed by this week to enable the to better track foreign funds to non-government bodies (NGOs) has alarmed the latter.

Existing law says have to be registered to be eligible to receive foreign aid. But under the new law, replacing the earlier one of 1976, all these will now have to also be working for the “national interest” to be eligible to get aid. The term hasn’t been defined.

“It will give the government almost unlimited freedom to clip the wings of any civil society organization if it takes up issues that do not please the government. If you are working with people asking for land rights or opposing a government project, it may be termed anti-national,” says Rajesh Tandon, founder of the Society for Participatory Research in Asia.

The new law has made it mandatory for to renew their FRCA registration every five years. Under the law, NGOs have to file annual returns on their foreign flow receipts and expenses or lose their registration.

The latter provision is already there in existing law, but many don’t observe it. In 2008, of 34,803 registered associations under FCRA, only 18,796 filed receipts or returns with the home ministry.

Under the new law, the FCRA registration of such organizations which don’t file returns would automatically be cancelled after every five years. And for three years, they would not be able to re-apply, says Harsh Jetli who heads VANI, a network of 2,000-odd NGOs.


# Annual returns to be filed by NGOs on foreign fund receipts and expense

# Apply for renewal every five years

# Cancellation if returns not fled

# NGOs against national interest not eligible for foreign funds

# FCRA silent on definition of national interest

Tandon says finance flows are already being monitored under the by the finance ministry and FCRA should also be in its terrain, not that of the home ministry.

He adds the new law lists penalties for the NGOs who don’t file returns annually but is silent on the reverse accountability principle. For instance, penalty for ministry officials who delay a renewal without reasonable cause. Without such mutual accountability, the entire effort is more a tool to harass and control NGOs, not to improve transparency or accountability, he complains.

First Published: Mon, August 30 2010. 00:08 IST