In recent developments, the Union Government of India has imposed stringent regulations on ten international Non-Governmental Organisations (NGOs). The NGOs, primarily involved with Child Rights, Climate Change, and environmental projects, have been subjected to restrictions on funding.
Regulating Guidelines from the Ministry of Home Affairs
The new restrictions emerged in February 2021 when the Ministry of Home Affairs (MHA) issued revised guiding principles for banks under the Foreign Contribution (Regulation) Act, 2010. This followed after the Reserve Bank of India demanded that multiple foreign organizations be placed on the Prior Reference Category (PRC) list, which now contains over 80 international agencies. This essentially means that any foreign donor wishing to transfer funds to an association in India will need prior clearance from the MHA.
Provisions Under the FCRA Amendment, 2020
Under the amendments made to the FCRA in 2020, an organization must fulfill certain criteria to be registered under FCRA. It should have been in existence for at least three years and spent a minimum of Rs 15 lakh on its core activities in the last three fiscal years for societal benefit. Furthermore, NGOs must also provide commitment letters from their donors, specifying the proposed use and the amount of foreign contributions.
Reasons for Imposing Restrictions
The curbs were instituted primarily due to evidence of misappropriation or misutilisation of foreign contributions by numerous NGOs. Despite a significant increase in foreign contribution inflow between 2010 and 2019, many recipient organizations did not utilize the funds for the intended purpose. As a result, the central government took drastic steps to cancel the registration certificates of over 19,000 recipient organizations between 2011 and 2019.
Potential Implications of the Restriction
This move has raised concerns about its potential impact on the constitutionally assured rights to freedom of association, expression, and assembly, as provided by Article 19. The government’s actions have expanded governmental discretion while extending bureaucratic control and oversight over day-to-day NGO operations in India.
The regulations could also negatively affect NGOs’ humanitarian work by tying them up with administrative red tape, making it more challenging for independent grassroots NGOs to operate within India.
Additionally, these measures elevate concerns about repressing freedom. The enactment of the FCRA Amendment, 2020 positions India alongside Russia, where similar laws have been employed to curtail freedom of association and expression.
International organizations have voiced their concern over the use of the Foreign Contribution Regulation Act as a tool to suppress activists and non-governmental organisations in India.
The Way Forward
Although regulation over foreign contributions is essential, excessive rules can hinder the functioning of NGOs that play a vital role in implementing governmental schemes at the grassroots level. These NGOs often fill gaps left by the government in their civic duties. As such, the imposed regulations should strike a balance, allowing for resource sharing across national boundaries, essential for the functioning of a global community, unless there’s explicit evidence that the funds are aiding illegal activities.