A blow to NGOs

The Centre For Social Impact and Philanthropy in its report has pointed out that there will not only be an increase in school dropouts and child marriages but also a decrease in immunisation and access to healthcare due to the economic downturn induced by Covid-19. This will make it strenuous for India to achieve its sustainable development goals. During such testing times, especially when there have been reports of a 40% plunge in foreign contributions in India, the Foreign Contribution Regulation (Amendment) Act, 2020 (FCRA) has been passed without much debate. The amendments pose grave concerns to the development of non-governmental organisations (NGOs) in India.

The thresholds for administrative expenses of NGOs have been reduced from 50% to 20%. Imposing such a cap not only results in ‘legislative overreach’ but will also adversely affect think tanks and NGOs where the expenses for providing services to the social sector are counted as ‘overheads’. This will greatly hamper innovation, impact measurement, and livelihood of workers at such organisations. It is also believed that the said cap on expenses will result in the closing down of multiple small-scale NGOs that are responsible for vital works among the commons.

Under the previous regime, redistribution of funds was allowed only to the FCRA compliant organisations. But the new amendment completely prohibits the redistribution of foreign funds which might disincentivise bigger NGOs from funding smaller NGOs.

This will push the funders to support larger organisations instead of smaller ones who focus on the upliftment of marginalised communities. This might result in a dearth of funds for the smaller NGOs, especially when there have been projections of a decline in the social impact funds due to Covid-19 thereby leading to their extinction. The work of smaller NGOs in remote areas will also suffer especially since they work in tandem with the bigger NGOs.

The government’s allegations of ‘misuse of FCRA funds’ for anti-national activities by NGOs have never been substantiated with valid proofs. Thus, requiring channeling all the funds through the New Delhi branch of the State Bank of India (SBI) is unnecessary and will result in high transaction costs for such organisations. A public sector bank such as the SBI might exacerbate the constraints imposed on NGO’s through bottlenecks due to their limited knowledge about the FCRA mandates.

NGO’s are now required to provide details of Aadhaar cards of all their office-bearers, directors, and key functionaries to the government, supposedly to add accountability of all actors involved in FCRA activity. The Supreme Court ruling in Justice K. S. Puttaswamy (Retd.) and Anr. vs Union Of India And Ors regarding the application of Aadhaar does not support the idea. Although some non-governmental organisations (NGOs) engage in dubious activities, many upright bodies exist among them. It may be indecorous on the government’s part to limit the activities of such organisations.

The International Commission of Jurists (ICJ) has stated that the FCRA amendments are not in consonance with India’s international law obligations. The amendments are in violation of the Article 22 of International Covenant on Civil and Political Rights (ICCPR) as it obstructs human rights defenders and civil society organisations from carrying out their important activities.

Also, the amendments completely disregard the discussions made in the UN Special Rapporteur for freedom of Assembly and Association in 2016’ wherein it was pointed out that such laws could be used to ‘silence any association involved in advocating political, economic, social, environmental or cultural priorities which differ from those espoused by the government of the day.’

While the FCRA has increased bureaucratic control and oversight over the functioning of NGOs in India, it has deteriorated the spirit of unity and cooperation that had been ushered in by such organisations during the Covid-19 pandemic. NGOs often play a crucial role in filling the void created by the inadequacies of the government in its developmental schemes. Hence, undermining the efforts of NGOs by imposing such paralysing restrictions on them might lead to the downfall of the eco-system of NGOs in India. While Amnesty International has shut down its operations in India due to the strict FCRA mandates imposed by the government, the impact of the same on the rest of the NGOs remains to be seen.

(The writers are students at School of Law, Christ (deemed to be) University)