It is time to repeal the FCRA Act, 2010, indeed, though not in the manner that our civil society and NGOs deem fit.

The FCRA Act, 2010, defines disclosure rules for non-profit organizations that accept funds from abroad for activities that they deem to be for the benefit of Indian society and democracy.

A recent article has argued for much greater leeway to non-profits to accept funds from abroad and argues for little or no oversight. Any oversight is to be provided by a voluntary organization composed of actors from civil society themselves.

This argument is made out of the two assertions that political parties themselves accept funds from abroad and terms any Government’s denial of license to accept foreign funds as an assault on democratic freedoms.

Here we make an argument to repeal the FCRA and simply ban any entity from accepting funds from outside India for non-profit activities, both NGOs and Section-25 companies.

Why does FCRA need to go?

Foreign funding for NGOs has the following impacts:

Subvert the democratic processes of law-making and law enforcement. ‘He who pays the piper calls the tune’, as the saying goes

Weaken the Government’s standing in implementation of policies and laws.

Weaken native Indian control over educational and social services.

Hamper economic growth

ecological and social justice grounds, but could be directed by foreign forces inimical to the Indian Republic.

The disclosure norms were put in place to improve transparency and for tracking of funds. NGOs have circumvented this rule by accepting funds in the name of a single entity, a ‘control organization’, and further disbursed funds to unregistered organizations.

Funds can be collected only for research, training, awareness, rehabilitation and relief for victims of man-made and natural calamities, maintenance of buildings and real estate for philanthropic activities.

Independent analysis has revealed that nearly Rs 6000 crores have been amassed as cash and cash equivalents and for acquisition of vast tracts of real estate.

Investigation also has revealed that foreign funding has intervened extensively in legislative actions, through the PIL route.

Examples are those of lobbying against the Himachal Pradesh Anti-Conversion Law, lobbying against traditional practices such as Jallikattu, Kambala, temple elephant in the name of animal rights, prisoner visit boards, lobbying for self-regulation by FCRA NGOs, Article 377, challenging appointments to Central Vigilance Commission. Women’s Power Connect, a high-powered American political entity that has advocated and lobbied for gender-specific laws in India.

Foreign NGOs have also intervened in the executive, like establishment of Childline support. Several members of the National Advisory Council, an extra-constitutional body established by the UPA Government to steer the course of Government, had many high-ranking appointees with leadership positions in foreign-funded NGOs.

The best solution is to not allow foreign funding for non-commercial activities, since the entire sum can be raised within the country itself. Remittances for non-profit activities has never been more than US $2 billion pa. In a US $ 2 trillion economy, this quantum of money can be raised through domestic sources, without having to compromise on national self-respect and sovereignty.

The outlay for CSR spending is already Rs 5000 crores per annum, which is comparable to FCRA funds of Rs 7500 crore.

Critical changes that can be proposed to the funding

A public body, comprised of representatives from the Executive Government, members of Opposition from Central and State Legislatures, Judiciary, including retired Judges, religious and socio-cultural representatives can be appointed for the purpose of routing CSR funds to NGOs, with due diligence as to their nature and purposes.

All foreign funds must be paid to this body for further disbursal to NGOs.

This will eliminate the need for FCRA registrations, approvals, renewals and regular returns. Instead, we can have a situation where foreign money is disbursed to NGOs and Section-25 companies on the basis of the recipients applying for funds from a common pool administered by an independent public body.