FCRA changes risk expanding state control over civil society space

Proposed FCRA changes risk tightening control over NGOs, raising concerns over administrative overreach and constraints on legitimate civil society work

Proposed amendments to the Foreign Contribution (Regulation) Act (FCRA), introduced during the recently concluded Budget session of Parliament, risk underlining India’s reputation for administrative overreach. Among the key changes proposed in the Bill, the passage of which was deferred following an uproar by the Opposition, is the creation of a “designated authority” to take over, manage, or dispose of assets created from foreign funds if a non-government organisation’s (NGO’s) FCRA licence is suspended or cancelled, or not renewed.

 

This Bill marks another step in the progressively strict regime that the Centre has imposed on the functioning of civil society since 2010, when the FCRA Act was enacted to regulate foreign contributions received by individuals, associations, and NGOs. The impact can be seen in the government’s dashboard, which shows that 14,958 FCRA associations are active, 21,979 had their licences cancelled, and another 15,187 licences are deemed to have expired. Amendments in 2016, 2018, and 2020 successively tightened the terms on which NGOs were permitted to function. These included opening an account with the State Bank of India’s Parliament Street branch, stipulating the amount of funds earmarked for administrative costs, restricting sub-grants to smaller NGOs, and meeting minimum expenditure thresholds.

 

According to the Bill’s “Statement of Objects and Reasons”, the amendment has been introduced to ensure that such foreign funds are not used for causes that “adversely affect national interest”. Since the amplitude of “national interest” can be wide, this phrase considerably expands the scope for a government to cancel the FCRA permit for NGOs involved in activities it deems inconvenient. The “Statement” also explains that the amendment was introduced to address operational gaps. Indeed, the amendment in 2020 had the provision for vesting with an authority the assets of NGOs whose FCRA permit has been cancelled. The latest amendment lays down the procedure under which this can be done. Remarkably, the proceeds from the assets sold or transferred are to be directed to the Consolidated Fund of India. Additional elements of arbitrariness include permitting an authority designated by the government to act as a custodian of the assets, even undertaking the activities of the NGO or individual concerned “if considered necessary or expedient to do so”. If the activity of the institution concerned is considered necessary, why deny to it the foreign funds needed to keep it operational? The Bill also provides for the assets to be restored if an FCRA certificate is renewed or restored, or a fresh one granted, but subject to certain conditions.

 

It is nobody’s case that all recipients of foreign contributions are above board and do not require monitoring. But in seeking to stall the transgressors, the Centre has complicated the functioning of legitimate foreign-funded NGOs that have contributed to poverty alleviation, nutrition, education, health, or gender rights. In a country as vast as India, the government has struggled to deliver these basic necessities uniformly. In fact, tacit recognition of the need for civil-society support can be seen in the introduction of the mandate for corporate social responsibility. Further, the sprawling domestic NGO sector is not subject to a similar regime, though there is no evidence to suggest they are any different in nature. Such asymmetric treatment does not enhance India’s standing as an impartial jurisdiction.