Passage of FCRA (Amendment) Bill targets civil society as a whole

It projects foreign funding for NGOs as a major security threat while failing to provide a shred of evidence on how they can cause damage to the Indian state

Data collection, Union Budget 2019, Economic Survey 2019, India
Union Minister of State for Home, Kiran Rijiju proudly claimed that his government had cancelled the FCRA licenses of 4,842 NGOs in the last three years for not meeting the technical requirement of filing annual returns and the figure is 19,000 cancellations since Modi came to power in 2014. Representational image: iStock

Many political observers were amused by some seemingly contradictory moves of the Modi government in September 2020.

Capitalizing on the opposition boycott of the parliamentary session over suspension of eight MPs, the government rapidly passed several Bills without much discussion or scrutiny. One of them was the Foreign Contributions Regulatory (Amendment) Bill, which aims at curbing the role of the non-governmental organizations (NGOs).

With this Bill, the government projected foreign funding itself as a major security threat. Commenting in the wake of the hurried passage of the Bill, the Union Minister of State for Home, Kiran Rijiju proudly claimed his government had cancelled the FCRA licenses of 4,842 NGOs in the last three years for not meeting the technical requirement of filing annual returns and the figure is 19,000 cancellations since Modi came to power in 2014.

The list is strewn with the names of Church and Islamic charities but we do not get to see the name of a single RSS SEWA outfit. It seems the biased agenda of the Hindu Right orthodoxy exerts considerable influence over the Modi government.


Ironically, when people pointed out the paradox of foreign funds flowing without any accountability under FCRA into PM-CARES, a fund floated by the Prime Minister under his own personal control bypassing the established governance structures like Prime Minister’s Relief Fund, the Home Ministry had to issue a clarification through a reply to an RTI query that the Home Ministry had the discretionary powers to exempt any fund from the purview of FCRA!

Side by side with the passing of this draconian law, Niti Aayog, the other arm of the government, issued a passionate letter signed by its CEO, Amitabh Kant, to 17,000 NGOs to join the government’s efforts in COVID relief. Why carry on a witch-hunt against the NGOs when you are to fall back on them at critical junctures?

Most of the editorials in leading dailies disapproved the FCRA Bill. They pointed out that the NGO sector, popularly known as the civil society, is an important substitute force filling in the lacunae in the formal bureaucracy in areas like welfare work and service delivery in the social sectors. The Modi government is throwing away the baby with the bath water, they opined.

The Modi government has been carrying on a witch-hunt against the civil society for the last six years though it is unable to come up with even a shred of evidence that the NGOs pose a security threat to the Indian state. The offensive against the NGOs was originally started by the UPA government under Manmohan Singh. The successive governments and rightwing commentators have dubbed the NGOs as anti-national or at least as anti-development. Their role in the movements against mega projects with questionable utilities displacing millions as in the case of the Narmada Dam, mining projects in Odisha, nuclear power projects like Koodankulam, Jaitapur and Kaiga, and against liberalization of environmental controls on diverting forest lands to corporate projects etc., was painted as anti-development. But the activists were not deterred by such allegations and went ahead with their activism thanks to the popular support their chosen causes enjoyed.

Apart from crippling the NGOs and the activists, it seems the Modi government aims to narrow down the legal space available for the higher judiciary in coming to the aid of activists. For instance, when activists succeeded in closing down the polluting plant of the Sterlite Copper in Tuticorin, the Madras High Court upheld the State government’s decision for closure and subsequently the Supreme Court also upheld the High Court’s decision. More importantly, when the government directed the CBI to file a case against activist-lawyer Indira Jaising and her partner for FCRA violation and then when the CBI raided their home, the Bombay High Court restrained the CBI from taking any coercive action. When the CBI appealed against it in the Supreme Court, the apex court refused, in November 2019, to stay the protection given to these advocates by the Bombay HC. Not learning its lessons, the government probably harbours fond hopes that with new laws they can narrow down the legal space for protection of rights.

Also read: Municipality gets helping hand from NGOs in COVID-19 fight

In trying to silence a few high-profile activists, it looks like the Modi government has ended up crippling the entire NGO sector. The new law caps the share of the administrative expenditure at 20 percent—instead of the earlier ceiling of 50 percent—of the total value of foreign funds received. To get to know the response of someone who had been an insider in the civil society sector, The Federal talked to Babu Mathew, the former Director, Action Aid India. He said: “The ceiling on administrative expenditure is not wise. We won’t get competent people to work in the NGOs as they will have to be paid high salaries. How the government would distinguish the administrative expenditure and the programme expenditure is not clear. If they include the salaries of the grassroots employees carrying out the programmes as part of administrative overheads, then that is the end of the NGO movement. At best, only service delivery NGOs run by not-so-well-trained people would be left.”

The new law also says that an NGO that receives foreign funds cannot transfer the funds to any other entity but spend all the money on its own directly. This betrays a total ignorance of how the NGO sector functions. Big NGOs resort to putting-out system wherein smaller NGOs execute the functions in a scattered manner in wide areas. The NGO activity is not highly centralized. By seeking to promote high degree of centralization and favoring the emergence of giant NGOs, the government seems to be working at cross-purposes vis-a-vis its own objectives.

This new law appears to be a bureaucrats’ revenge. As per this law, all the charities, numbering nearly 20,000, should open their account in a designated SBI branch in Delhi and operate their funds only through this account. This is ridiculous. In this digital age, the money trail can be tracked no matter how the money is channelized, through whichever account and from whichever bank. The government’s claim to establish transparency in such a clumsy manner was questioned by Babu Mathew. He said, “If any law promotes transparency, it is welcome. In the NGO sector, we find people of both types—those who use foreign funds properly as well as those who misuse. Democratic functioning is absent generally within the NGO sector but whether the Bill just passed would promote this is not clear. Whether such democratic functioning can be brought about through a law is also doubtful.” Many NGOs would only find themselves hamstrung with such idiotic conditions imposed on them that would only add to their administrative expenditure.

More than the operational and functional constraints, the political constraints that would result from the Bill are worrisome. Commenting on the politically doubtful motive behind the amendment Bill, Babu Mathew observed, “I don’t agree on the point of the law leaving discretionary powers with the Home Ministry for cancelling the licenses of the NGOs purely on political consideration. The political activity can be legitimate democratic activity as well. Say, those NGOs promoting voting in elections. That’s also a political activity. Even political activity, so long as it is not against the Constitution, should have legal protection. The Home Ministry’s very words used in the present regulation banning ‘any activity of political nature’ are wrong and should be replaced by ‘any activity of a political nature that is unconstitutional’. Blanket ban on politics, making politics itself a taboo, has no place in a democratic society.”

There are 22,447 active NGOs with FCRA registrations and only 532 of them failed to file returns in 2018–19. According to former CBI Acting Director M.Nageswara Rao, an average of Rs 1 lakh crore foreign funds came to the Indian NGOs per year over the last 20 years. This is big money which adds to the aggregate demand. Thanks to the recession, the Western funding agencies are already squeezing the flow of funds and Modi seems to be playing into their hands. Sinking into a recession, his government’s move to further squeeze funds flow of this order purely out of political bias is a short-sighted one.

(The author has been engaged in labour studies for the last three decades and is currently focused on developing new media communication skills among tech workers)

(The Federal seeks to present views and opinions from all sides of the spectrum. The information, ideas or opinions in the articles are of the author and do not necessarily reflect the views of The Federal)