Beyond FCRA

Governing NGOs demands consistency and transparency

Amendments to the Foreign Contribution (Regulation) Act (FCRA), passed by the Rajya Sabha on Wednesday, appear to enhance the draconian regime that successive governments have imposed on non-governmental organisations (NGOs), especially foreign-funded ones. Coming as it does just months after the stellar role NGOs played during the migrant workers crisis, compensating for the government’s tardy response, it points to the regime’s aversion to implicit criticism embedded in the actions of civil society organisations. To be sure, the amendment Bill contains some provisions that are unexceptionable, such as the one that requires the NGO to provide the Aadhaar numbers of office bearers or copies of passports if the office bearer is foreign. Since corporate directors are required to file such details with the Registrar of Companies, there is no reason for NGOs not to be accorded equivalent treatment. NGOs have, however, complained strongly about the amendment capping administrative expenses to 20 per cent of the foreign contribution, down from 50 per cent.

Although this can be validly construed as interference in the functioning of NGOs, it is also true that executives of some of the larger NGOs enjoy lavish lifestyles out of proportion to the nature of their work. The problem, however, is that the definition of administrative expenses also covers salaries of outreach workers, field staff, and others who work at the coalface of the voluntary sector. This move, then, could well put the brakes on the healthy trend towards the emergence of a professional voluntary sector, which has been the cornerstone of the development of civil society in the West. No less harmful is the amendment prohibiting the transfer of foreign funds to any other person or organisation. The Voluntary Action Network India (VANI) has rightly pointed out that this stipulation would stymie collaboration within the NGO community. There are thousands of small organisations doing stellar work at the grassroots but lack the wherewithal to source foreign funds. Proscribing indirect funding can do immeasurable harm to a voluntary sector that all too often fills the absence of the state in social infrastructure.

Taken together, these amendments point to the government’s inherently flawed approach to the voluntary sector. As VANI has pointed out, the overall approach assumes that all NGOs are guilty unless proven otherwise. This is the nub of the issue, not just with the current government but the predecessor United Progressive Alliance too. Both regimes have a well-documented record of wielding the brute power of the state’s security apparatus against people and organisations in the voluntary sector that speak or demonstrate truth to power. The aborted order in 2016 that all NGO office bearers compulsorily declare their assets is a case in point. This, even as thousands of others go scot free despite misusing donations, including for money laundering operations.

Given the increasing importance of civil society in the days ahead, not least to cope with the deleterious impact of the pandemic, the government needs to approach the sector with consistency and transparency. India’s sprawling NGO sector — one of the world’s largest — is amorphous and opaque. Instead of limiting the disclosure of FCRA organisations, it is vital that all NGOs operating in the country, irrespective of the source of their funds, file disclosures of their income and expenditure on a website that is available in the public domain, not just the government.