The Foreigners Contribution Regulation Act (FCRA) was conceived in sin, during the Internal Emergency the then Prime Minister Indira Gandhi had imposed, placing India for 22 months under a dictatorship of which and her son Sanjay Gandhi were the unchallenged rulers. The Constitution of India was all but suspended, and with it, fundamental rights, including the Right to Freedom.
Mrs Gandhi had just seen her election overturned on technical grounds – the sort that in the 21st century are not even noticed. The months leading up to the Allahabad court ruling on the Rae Bareilly pocket borough election in Uttar Pradesh, had seen a nation-wide agitation against misgovernance and political and other corruption led by the towering mass leader Jai Prakash Narayan, popularly known by his initials, JP. Joining him were Gandhians, socialists of the Lohia variety, hordes of youth and students leaders including one Laloo Prasad Yadav in Bihar, and several Congressmen, among them Chandrasekhar, a Young Turk in the party from Ballia, in UP.
And then, JP called upon members of the armed forces to join in the mass rebellion against the regime.
Mrs Gandhi threw everyone in jail, imposed censorship, told the Supreme and high court judges where they got off, and ensured no man or woman in uniform would ever dream getting out of line.
The war of liberation of Bangladesh in 1971, when the United States sent the Seventh Fleet of its Navy towards the Bay of Bengal, stalking the Indian navy at a time it had hunted down Pakistani submarines in those water, had taught Mrs Gandhi to distrust the West. She was more than ever entrenched in the Soviet military strategic environment. She perhaps had reasons to think that Germany, the UK and perhaps, the US were fanning the opposition building up against her. Gandhian institutions, sympathetic to JP and George Fernandes were particularly suspect.
It was in this psychological frame of mind, fearing enemies everywhere, that Mrs Gandhi and her legal advisers birthed the FCRA. It was meant to choke the funding from external sources to NGOs and individuals that came in legitimately through banking channels.
The Indian government rule book says “foreign contributions include currency, securities, and articles. Funds collected by an Indian citizen in a foreign country on behalf of an NGO registered in India are considered foreign contributions. Moreover, funds received in India, in Indian currency, if from a foreign source, are considered foreign contributions.”
Crooks, organisations such as the RSS, spies and saboteurs of course never did depend on banks, which Mrs Gandhi had nationalised anyway years earlier. Their routes were hawala, alive now as it was half a century ago, and trusted cadres who could smuggle in currency as personal baggage. Even now, Individual Indians can bring in a dollar short of US$ 5,000 without hassle.
The law Mrs Gandhi created targeted honest NGOs, and activists. Subsequent prime ministers, including several who rose from the many she had jailed as activists in 1975, retained the FCRA when they came to power, to target their own enemies. This happens almost as a rule with most draconian laws.
Mr Narendra Modi, who shares most of his negative traits as much with Mrs. Gandhi as with his best friend and US President, Donald Trump, has ratcheted it up to a very focussed targeting of Human rights and Civil liberties NGOs, the Christian Church and elements he feels are inimical to his government, his party the BJP, or are in the hit list of his parent organisation, the RSS.
In its latest move, the Home ministry in September 2019 issued orders that each functionary and member of a non-governmental organization seeking registration under FCRA will have to file an affidavit declaring that the individual has not been involved in any act of religious conversion or prosecuted for communal disharmony.
"Office bearers and key functionaries and members" are to certify that they have not been "prosecuted or convicted" for "conversion" from one faith to another and for creating "communal tension and disharmony", News18 said quoting the notification. FCRA amendments of 2010 by the Manmohan Singh government has said only the applicants such as directors who were seeking permission to receive foreign contribution were required to make such a declaration.
The new amendments also require every member of an NGO to also swear an oath, through an affidavit, to certify that they have never been involved in "diverting" foreign funds or propagating "sedition" or "advocating violent means". This declaration, too, needs to be given to all members of an NGO. Earlier, this declaration was to be only given by the applicant of an NGO.
It is not clear if the rule implies that only conversions to Christianity are to be penalised. If conversion to any religion from any other religion is suspect, then the many Ambedkarite organisations would not be able to fill up and sign such an affidavit, would they? The Ghar Wapsi gangs are not mentioned because they surely do not have FCRA accounts, and most of the like are paid in cash or extort cash from their victims.
As a palliative after-thought, the new rules say individuals receiving personal gift valued up to Rs 1 lakh need not inform the government. Earlier, the threshold value was Rs 25,000, as per the market value of the gift item in India.
Mr Modi has over the past five years tightened rules and procedures to receive and utilise foreign contribution. Exact details are not available on the internet, but FCRA licences of over 18,000 NGOs have been withdrawn, ostensibly on charges of violating the Act.
So how many remain, and how many are again to be whittled out? The government is not saying.
There is, alas, no official record of the total number of NGOs of all varieties at the dawn of the Modi era. Thirty lakh, some had mentioned, including many unregistered ones, and many Mom-and-Pop shops that did not believe in accountancy or transparency. There were also monsoon crop NGOs born with a new regime, which took funds from the state or central government, and quietly faded away when their patron minister or bureaucrat lost his job.
But the victims have been the major ones which had stepped in when successive governments, right from the time of the great Jawaharlal Nehru, failed to the job they were supposed to for the basic needs of tens of millions of people on the margins, the then still untouchables, their women, people in the hills, deep in the forests of the tribal areas, or living in fishermen’s villages at the mercy of the sea and wind.
Among the biggest of the victims was Compassion, an international NGO which brought succour, calories, clothes, and education, to millions of children in thousands of villages over the decades. It was told to pack off, accused of everything including conversions to Christianity.
As with Mrs Gandhi, Mr Modi also targeted human rights groups. And those working in the empowerment of the poor, in giving them training and equipping them to a rights-based future. Amnesty, outspoken on Kashmir and several other Sangh pet issues, is the current whipping boy. People seem convinced it will be forced to close operations in India sooner than later.
India is among the few countries as interested in the donors as in the recipients. There is a Watch-Listing of Donors. On the 16th of June 2016, the government cancelled the registration of NGO Sabrang Trust, an organization run by civil rights activist Teesta Staved, after receiving funding from the US-based Ford Foundation. Ford Foundation was put on a “watch-list” by the Ministry of Home Affairs following a Gujarat government complaint that it was “interfering in India’s internal affairs” and “promoting communal disharmony” through engagement with Sabrang Trust.
According to data from May 2016, the Ministry of Home Affairs had put eighteen major foreign donors on this watch list. While it appears that in some cases the proper procedures under FCRA were not followed, these examples also provide insight on how the Indian non-profit, as well as the foreign donor need to be aware of these regulations and how they may affect their activities in India.
The Supreme Court of India ordered an audit of 3 million non-profits on January 11, 2017: “[t]he targeted NGOs were those receiving funds from the government or foreign sources under the FCRA. According to Court, ‘mere blacklisting of NGOs who do not file annual statements will not suffice but also action must be initiated like criminal proceedings for misappropriation and civil action for recovery of given funds.’ The order came after an amicus curiae cited a finding by the Central Bureau of Investigation (CBI) that only 10% of NGOs filed annual income and expenditure statements.”
Foreign agencies feel the statement from the Supreme Court indicates that FCRA will increasingly be relied upon by the authorities in an effort to ensure compliance of the non-profit sector with the strict requirements of Indian Law.
Indeed, an interesting look at the process of foreign resources for Indian non-governmental organisations comes not from the angry souls of New Delhi’s several control agencies – both the Foreign office and the Home ministry are deeply involved – comes from the US and its NGO groups which facilitate donations.
“Thinking of making a charitable donation to a non-profit in India? While the country is home to the most non-profits in the world, giving to India can be complicated even for experienced Grantmakers,” say the catch line of the CAF America, one of these groups.
CAF America says has made more than 1,400 grants totalling nearly $7 million dollars to FCRA-registered non-profits in India within the past 5 years. “We maintain full legal compliance with Indian laws and work with our partner office, CAF India, to keep abreast of the ever-changing regulatory environment impacting Indian non-profits. CAF America can expedite grants to 200+ Indian charities within a week.”
It points out that that though India is one of the fastest–growing countries in the world, approximately 270 million of its people live in poverty. “These significant levels of poverty may account for the presence of an estimated 3 million non-profits operating in the country. This robust non-profit sector, combined with the presence of a thriving Indian diaspora community in the US are a driving force behind cross-border giving to India.”
American citizens who want to support charitable initiatives in India and receive a tax-deduction have a few options to consider: they may donate to a US-based non-profit which has programs in India, a “friends of” organization which supports an Indian non-profit, or use an intermediary grant maker (such as CAF America) to tax-effectively support the organizations and causes they value. Friends of e BJP is of course one of the groups that would come in this definition
CAF warns donors “Unfortunately, FCRA status is tenuous, with charities having licenses revoked and bank accounts frozen in recent years.
The International Centre for Not-for-profit Law (ICNL) estimates that only about 29,000 non-profits are registered under FCRA.
ICNL notes that that since 2015, FCRA registration and reporting has moved entirely online. While this was welcomed by the Indian non-profit sector, it also increased the requirements for reporting. Now every foreign contribution must be publicly reported, whereas previously only contributions in excess of $146,000 were affected by this requirement. Additionally banks must now also report to MHA all foreign contributions that an individual or organization receives within 48 hours. Lastly, annual returns must be filed (form FC-4), along with confirmation that the non-profit has “not used foreign funds for activities that are likely to prejudicially affect the sovereignty and integrity of the country, the security, strategic, scientific, and economic interests of the State and the public interest”.
This latest modification, the US group says, raises concerns for many organizations. As donors may expect, the broad language used in this section allows for a broad interpretation of this requirement. In practice, it is very likely to inhibit the use of foreign funding for human rights issues, legal rights, policy, governance, electoral reform, and other sensitive issues.
There is serious concern in the NGO sector. Will there be life after FCRA, so to say. What will happen if foreign donations are banned in toto? Especially to religious groups which are increasingly the target. Essentially this means the Christian church, its institutions and its own outreach programmes. Though every rupee of the foreign money is ploughed into the Indian economy and empowers the very poor, the Hindutva fear of the empowerment, and the fear that the marginalised may reject the religion of their birth as forecast by Dr B R Ambedkar, makes right wing lawmakers very wary.
They themselves do not depend on banking channels for their financial support. Apart from the political philanthropy of some of the big business houses dependent on the goodwill of the governance system – the politicians if one is to be blunt – the Indian political system depends on unaccounted money and unlisted sources. The laws have been changed to suit political parties. The donations to them remain beyond public scrutiny.
For others there is always hawala, a by-product of the old financial mechanisms of traders, gun runners and the underworld. The brutal FCRA may yet give them a new life.
(Published on 30th September 2019, Volume XXXI, Issue 40)