Every bad law is justified under the guise of ‘good intention’. The Foreign Contribution (Regulation) Act Amendment Bill passed by the Parliament is no exception. The government has defended it spelling out the good intentions behind it: To bring in transparency and stop misuse of foreign contribution. But the stark reality is far from what the government claims. The new law will sound the death knell of non-governmental organisations in the country. It will cut the lifeline of majority of organisations as they will be starved of funds. It bans transfer of funds from the FCRA account of one NGO to the account of another one. Herein lies the trap. Big NGOs, with nation-wide operations, collaborate with partner organisations at local level for better outreach. The grassroot-level NGOs are the backbone of relief, rehabilitation and development work in the country as they have the wherewithal to do so. On the other hand, bigger NGOs function as the funding agencies of the local partner organizations. The new regulations on fund transfer will strangulate the grassroot-level organisations as they will be left penniless. 

This apart, there are other provisions in the new law that will hamper the working of NGOs. The amendment brings out the ‘hypocrisy’ in the ‘words and deeds’ of the present regime. It does not see any incongruity in PM CARES fund receiving foreign contributions. But transferring funds from the FCRA account of an NGO to the account of another becomes anathema for the government. It is the same government that has allowed political parties to receive foreign funds from Indian-registered foreign companies through electoral bonds, which is shrouded in secrecy. The biggest beneficiary of the electoral bonds is none other than the BJP.

The functioning of the NGOs will hit hard by reducing the cap in administrative expenditure from 50 per cent to 20 per cent of the funds received during a fiscal year. To justify the new rule, the government has come out with the lame excuse that it will prevent the NGOs from turning extravagant. The government has conveniently forgotten the fact that a part of the administrative expenses is going towards enhancing the work efficiency of employees and such other professional activities; this is apart from payment of salaries, professional fees, utility bills, travel and other such expenditure. 

By permitting the suspension of the license of ‘erring’ NGOs for more than six months, the government seems to be indirectly making ‘inconvenient’ NGOs out of action for as long as it wants. The renewal of FCRA license too has been made subject to the satisfaction of the Ministry after its enquiry. This is nothing but putting hurdles and making the renewal subject to the ‘whims and fancies’ of those entrusted with the enquiry. The government claims that several cases of misuse of funds have come to light. The existing laws are enough to suspend or cancel the license of NGOs if they are found to indulge in illegal or unlawful activities. It is unwise to burn the house to smoke out a rat. The government seems to have some agenda in keeping the NGOs on a tight leash.