On September 20, this writer received an alert on WhatsApp. The message said that an amendment to the Foreign Contributions Regulation Act (FCRA) was being proposed. The Bill was being presented in the Lok Sabha for discussion. A majority of the civil society leaders were shocked as they had no clue what this Bill was about. At a time when even a small event in one of the remotest regions of the country or the world gets flashed within a few minutes, how can such an important amendment skip anyone’s attention?
 
A news-item published in the Times of India had acquired sudden attention. The report, too, was incomplete as information about the Bill was not available in THE public domain. Even the popular website prsindia.org had no information. It was only when the discussion started that we got to know what was being proposed.
 
It seems the government was aware that the proposed amendments would be criticised by the NGO sector. Soon, we could realise how deadly this could prove for the entire sector. Everyone was worried about the consequences. The top leaders sprang into action. Various reports were published in the media raising some points against the Bill.
 
Within a day, the Bill was passed in the Lok Sabha. We all thought of various strategies of approaching MPs so that it did not get passed in the Rajya Sabha. Many NGOs, also called CSOs, including the Voluntary Action Network of India (VANI), Oxfam India, Population Fund of India and many more, issued Press statements. They took to social media to express their opinion and even approached the CSO Committee of the Niti Ayog. Only to be trolled by the troll army! No one paid heed to what the sector wanted. And the Bill was okayed by the Rajya Sabha.
 
Soon after, we saw signature petitions being made appealing to the President for withdrawing the FCRA amendment. At the time of writing, what prevents this Bill from becoming an Act is only the President’s signature, which will soon be affixed. It will be no surprise if the Bill is notified overnight and made applicable with immediate effect. You never know, the rules may also be announced in a day or two.
 
Now, what has been worrying the development sector? And why does the Bill sound like a death knell for the civil society? Those who favour the government have been propagating that a major chunk of foreign funds is being received by religious institutions for conversion purposes.
 
However, the fact is that when we speak about foreign funds, it includes money from corporates, agencies like the Bill and Melinda Gates Foundation, USAID, UNDP etc. also. These agencies release funds only for a specific purpose. The main agenda for such agencies is to support the governments concerned in achieving the sustainable development goals (SDGs) through implementing agencies like the NGOs. Incidentally, the same government asks the NGOs to report on different indicators of SDGs to which India is also a signatory.
 
Now, how does the FCRA amendment affect such funds? A simple fact is that the entire sector works in collaboration with one another. For instance, one large NGO “A” gets a project for promoting livelihood opportunities in, say, 10 states of India. This NGO may not have presence in all the 10 states. 

Collaboration with grassroots NGOs in these states will certainly help in not only achieving the project goals but also in building capacity of smaller organisations with FCRA registrations and giving employment to people in these states. The amended Act now restricts transfer of funds to other organisations. In other words, the project that would have benefitted many people on the ground would be almost impossible to be implemented.
 
In fact, during the lockdown, many NGOs had collaborated with one another to provide financial support to the needy. A large portion of the money came from corporates like Google. Needless to say, it was foreign fund only. Lakhs and lakhs of people benefitted at that time. In fact, the Niti Ayog monitored the money spent by each NGO during the lockdown. 

Had this amendment been brought in at that time, no one would have received the benefit. At a time, when the sector is gearing up for helping people in getting livelihoods and contributing to the rebuilding phase of the economy, this amendment will be detrimental to the interest of not only the poor but also the entire country.
 
Similarly, the new Bill has reduced the capping for administrative expenses from the existing 50 per cent to 20 per cent. Some may argue that even 20 per cent is on the higher side. Why an NGO should have such high administrative cost? However, if we go a little deep into the definition of administrative expenses, you would know the reason. For a layman, administrative expenses would essentially mean expenses like rent, travelling, printing and stationery, telephone expenses etc. The fact is that the Act has also included salaries as an administrative cost.
 
For instance, in a health project, salaries paid to the field staff for creating awareness on ground should technically be considered as a programme cost. However, the Act defines it as an administrative cost. In other words, the amended Act will not give freedom to pay salary to the field staff, one of the most essential human resource for implementing the project. So is the case with research projects. Considering, this limit has been reduced, then the definition for administrative expenses needs to be modified.
 
Another concern that the sector has raised is opening account only in the State Bank of India, New Delhi branch, for receiving foreign funds. Nityanand Rai, Minister of State for Home, has clarified in the Parliament that the NGOs don’t need to go to Delhi for opening the account in the SBI, but they can apply through their nearest branch of the nationalized bank to comply with the new provision. Mandatory bank account with the SBI would mean deep suspicion of the central government on other banks in times of internet and push for digital India.  
 
Considering the kind of restrictions imposed on the NGOs, some may think it prudent to surrender the FCRA registration certificate. Well, this may no longer be a viable option. Why? A person who wishes to surrender his FCRA registration will also have to surrender the assets created with foreign funds. So, if an organisation has built its office or a school with foreign funds, it may certainly not be feasible for it to surrender the assets. It may pose a threat to its very existence. Is this not against Article 19 of the Constitution which provides for the right to business and profession?
 
Not only this, after the certificate expires, the government can now initiate an inquiry before renewing the registration merely on suspicion. Earlier, the Act did not give any such powers. Considering the fact that a renewal application will be treated at par with fresh application, the officials may misuse these powers. 

Not only this, the Bill has also increased the time period for conducting an inquiry in case of suspension of registration from 180 days to 360 days. In such a scenario, the concerned organisation would not be able to function for a period of one year. Earlier, the authorities were under an obligation to complete the inquiry within 180 days and decide, either to cancel or renew the registration.
 
Over the last few years, the sector has already faced a lot of hardships in view of the abrupt changes in the FCRA. Close to 20,000 organisations lost their registration. A report published by Bain & Co. shows that foreign funds in India dropped by 40 per cent over the last few years. 

Of course, there was an increase of 15 per cent in indigenous funds. However, one just cannot imagine the kind of impact it would have had on the beneficiaries. The report also says that “economic growth alone won’t be enough to achieve India’s development goals. India needs social impact at scale to eradicate poverty and challenges affecting its poor and at-risk citizens.”
 
The human development index (HDI) and SDG Index reports show that India has not been able to improve over the last few years. The country ranked 130 on HDI in 2018. Interestingly, we stood at the same position in 2014 also. Similarly, we have dropped by 2 points in 2018 on SDG index compared to 2016 when it was announced. 

Considering the huge crisis the country is going through in this pandemic, our positions on both the indexes will deteriorate further. And if the sector that has been playing a major role in the development of the country is affected by financial crisis or is throttled to death like this, India’s story will only look gloomier.
 
The India Philanthropy Report 2019 estimates that even if India is able to sustain its current economic growth (which in any case did not happen as GDP is in the negative) and funding growth rate, it will still need an additional funding of Rs 4.2 lakh crore to achieve its development goals. However, post-FCRA amendment 2020, we will certainly have less money and capital available for achieving these goals. So, in whose interest has this BILL been passed? Only the government can answer.
 
The plea that this amendment will increase transparency and ensure strict compliance is a mere statement with no steam in it. It is important to keep an eye on the activities of certain non-compliant organisations but painting the entire sector with the same brush is sheer injustice.
 
It is a pity that the sector that played a huge role in supporting the government in achieving its goals and supplementing its work during the pandemic is being given a step-motherly treatment.
 
(The writer, a company secretary, can be reached at jassi.rai@gmail.com)