An innocuous news item in an English daily on Sunday, 19 July headlined “Ford Foundation relief” should shock the vast majority of gullible and could-not-care-less Indians as it again proves that Western organisations are usually disinterested in following the laws of a “third world country” like India.

Else, how does one react to the report that “Sources said Ford Foundation, which was not registered in India, has expressed its willingness to register under the Foreign Exchange Management Act (FEMA) and not the Foreign Contribution Regulation Act (FCRA)”. How atrocious is that! A foreign outfit was doing what it was doing, without any accountability thereby functioning as a law unto itself in India for the 67 years. And even today it wants to dictate terms to the host country? Is it the foundation&’s right to choose, or discard, Indian law?

However, by expressing its desire to avoid one set of laws and preferring another, the Foundation has exposed utter ignorance of the Indian system. FEMA and FCRA are two different laws. And Ford Foundation, as on date, cannot (repeat cannot) be registered under FEMA as there simply exists no provision for “registration”.

FEMA, effective 1 June 2000, is an “Act to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments for promoting the orderly development and maintenance of foreign exchange market in India”. A question, therefore, can legitimately be asked: “Is Ford Foundation planning to enter into external trade or is it already in it?” What exactly is the role and objective of the foundation in India? Exclusive ‘funding’? It should be clear even to a layman that a foreign organisation that is funding an Indian individual or an NGO, fairly and squarely falls under FCRA and not FEMA.

In fact FEMA is one of those Acts akin to Customs Act 1962, COFEPOSA 1974 and NDPS Act 1968 that is managed by law enforcement personnel empowered with penal/ legal provisions to counter those who violate the law of the land. FCRA, on the other hand, is an “Act to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit the acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected therewith or incidental thereto.” It also keeps an eye on the accounts pertaining to specific item of “foreign contribution” to Indians.

FEMA is for business, commerce, trade and the consequential violation of the law thereof. Section 2, titled ‘definitions’ of FEMA has 31 sub-sections (2a to 2z and 2za to 2ze) and nowhere is there a provision for any “registration” by anyone in the said Act. Overall FEMA has 49 sections and the Ford Foundation-suggested “registration” does not exist anywhere.

That takes us back to the relevant law of FCRA with which the foundation seems so uncomfortable. What exactly are the provisions of FCRA? And which clause of the said Act could be the irritant for the Ford Foundation? And why?

Perhaps the ‘Introduction’ of the FCRA 2010 itself is an irritant. “It had been noticed that some of the foreign countries were funding individuals, associations, political parties, candidates for elections, correspondents, columnists, editors, owners, printers or publishers of newspapers. They were also extending hospitality. The effects of such funding and hospitality were quite noticeable”.

The Government of India moved in to intervene. Hence “to have some control over such funding and hospitality…and with a view to ensuring that Parliamentary institutions, political associations and academic and other voluntary organisations as well as individuals working in the important areas of national life may function in a manner consistent with the values of a sovereign democratic republic the FCRA 1976 was enacted”. However, as several deficiencies subsequently were found, a fresh law was enacted in 2010 by the then UPA 2 Government. And the present NDA Government is well within its rights, powers and duties to implement and continue the task of execution of the Act.

The subject now is well understood. But what is this “registration” business which Ford Foundation is referring to? As seen before FERA has no provision for registration. Hence to talk about it would be tantamount to confusing the issue. FCRA does have a registration provision but it is not for the contributors or donors of money.

Section 11 of FCRA stipulates: “No person having a definite cultural, economic, educational, religious or social programme shall accept foreign contribution unless such person obtains a certificate of registration from the Central Government”. In the entire FCRA, which contains 54 sections is there any explicit mention of any registration of foreign contributor, agency or individual. The onus of registration is on Indians who receive the money. And the receivers will have to give full details of the source/origin of money on which the Government of India has the power to act as per law.

Before we end, let us examine a counter-scenario to clarify the present issue. Will any American government accept or tolerate, say the Tata Foundation, operating that country for 67 years to contribute/distribute money to local NGOs/individuals for activities not commensurate with the policies of Washington DC? Or lure high officials of the Pentagon, or the State Department, or the FBI, or the CIA to come to India on various research projects or seminar, round table conferences or group discussions pertaining to the role of policemen in US race riots, the divide between blacks and whites, the gun culture, drugs in US society, the discrimination in the USA, torture and denial of equal rights to women at work place, history of Red Indians or the global US intervention across Asia, Africa and Latin America? Is this possible? When Rajat Gupta and a host of other foreigners were charged for violating the law of the USA, did India or other countries take up the issue? Can they afford to do that? Of course not. Thus, just as the USA is a sovereign nation, which is fully within its legal rights to do what it takes to ensure that the rule of law and the rules and regulations of the state are followed by all, India too is an independent, sovereign nation and all foreigners/foreign agencies, including the Ford Foundation, will have to follow the law of India.

The author is a former civil servant and an Advocate, Supreme Court of India.