FOREIGN CONTRIBUTION (REGULATION) AMENDMENT BILL, 2020: AN STIGMA FOR THE NGOs WITH REGARD TO THE RENEWAL OF THE LICENSES by-Nitin Srinivas J
The Foreign Contribution (Regulation) Act, 2010 was enacted by the Parliament of India and came to effect from May 1, 2011, whose scope is to regulate the acceptance and utilization of foreign contributions or foreign hospitality by certain individuals or associations, or companies and to prohibit acceptance and utilization of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected therewith or incidental thereto. In September 2020, this act was amended by the Govt. of India which made several changes including a strenuous renewal process of licenses. Many NGOs and other organization have lost their licenses. It created a substantial tumult among NGOs. Some prominent and famous organizations like Mother Theresa’s Missionaries of Charity, IIT Delhi, Indian Medical Association lost their licenses. This article delineates the consequences of this amendment and the impact of the cancellation of licenses and how the Govt. should show some solaces towards them by renewing their licenses.
At the start of 2022, the Union Government of India cancelled the licenses of 6,003 NGOs under the Foreign Contribution Regulation Act. The Foreign Contribution Regulation Act was enacted in 2010 which the objective of regulating the contributions made by the foreign hospitalities to certain individuals, associations, companies, or organizations and also prohibiting the acceptance and utilization of foreign contributions for any activities detrimental to national interest and for matters connected therewith or incidental thereto. The act was recently amended on 29th September 2020. The Government stated the object is to strengthen compliance, enhance transparency and accountability in the receipt and utilization of foreign contributions, and facilitate genuine NGOs who are working for the welfare of the society. The Amendment created a great fuss among the NGOs who get contributions from outsiders. So far nearly 12,000 NGOs lost their FCRA licenses after the enactment of the amendment bill. This article puts forth the major amendments made and their following consequences.
KEY CHANGES BOUGHT THROUGH AMENDMENT:
- The Amendment bill includes public servants under Section 3(1) of the Act. It prohibits public servants from receiving foreign contributions along with others as per Section
- Section 7 of the Act permits the transfer of foreign contributions to others, registered under the act or who have obtained permission under FCRA for receiving it. The said provision also allows the foreign contribution recipient with prior permission from the government can transfer to others who have not registered under The Amendment bill prohibits any transfer of foreign contributions.
- Section 8 grants the recipients up to 50% use of the foreign contributions to defray administrative expenses like payment of salaries, travel expenses, After the amendment, the percentage shrunk to 20%.
- Section 11 after the amendment empowers the Central Government to restrain a person who has acquired prior permission under the act for utilizing the foreign contribution without the Government approval, if the Government, based on an inquiry, believes that such person has contravened FCRA, such a restriction can be imposed by the Government, pending further inquiry and before a person is found of such Prior to the amendment, the restriction will be imposed once the person is found guilty.
- The amended bill says that as per Section 17, the recipient of the contribution has to receive the foreign contribution only in an account designated as “FCRA account”, opened in a branch of State Bank of India at New Delhi. But it also provides the flexibility for the recipient also to open another FCRA account in any of the scheduled banks in India for the purpose of utilizing/keeping the foreign contribution that was transferred from the main FCRA account.
- The bill has introduced a new provision Section 12A enabling the Central Government to require any person who seeks permission or registration or renewal under the Act, to provide Aadhar Cards of its office bearers or directors or key functionaries or in case of foreigners, copy of their passport or overseas citizen of India card.
- The Amendment bill, every person who has been given the certificate of registration must renew within six months of expiration. The bill empowers the Government to conduct an inquiry before renewing the certificate to ensure that person filing the application
- Is not fictitious or a
- Has not been prosecuted or convicted for creating communal tension or indulging in activities aimed at the religious convention.
- Has not been found guilty of diversion or misutilization of funds among other conditions.
- The Bill adds a provision that enables a person to surrender his certificate of
- Under the FCRA, the Government can suspend the registration of a person for a period not exceeding 180 days. The Bill allows the government to extend up for an additional 180
OUTCOME OF THE AMENDMENT:
The Union Govt. has amended the act with the objective of strengthening compliance and enhancing the transparency in the diversion of funds. They also contended that the amendments are necessary to prevent the intervention of foreign subjects with the country’s subject matters. Though the amended provisions seem to be appropriate, there are many clutches that are held by the Government especially with regard to the renewal of the licenses. After the amendment, around 12,000 organizations’ FCRA licenses have been cancelled. Some of them got rejected since they did not opt for renewal. Several prominent and reputed NGOs like Mother Theresa’s Missionaries of Charity, IIT Delhi, Indian Medical Association, etc. got rejected. The diligence on the part of the Govt. regarding foreign funds is pertinent but the suspicion need not be targeted and unfair.
The concept of foreign funding and the suspicion around it is not some new thing as they prevail for a long period of time. However, the threat of funding the anti-nationals and socially disruptive activities in the name of social service are the ones which Government agitates. But terrorism and anti-national funding do not hide behind NGOs as they do such things by means of illegal ways. And secondly, the existing laws are more than sufficient enough to check out their purpose of utilization. The manner in which such NGOs were denied the issue of licenses
on technical grounds and the argument on the part of the Government seems to be factually germane. Nevertheless, they forget about the moral conviction towards the organizations. They forgot to overlook the humanitarian services rendered to society. Let’s take Mother Theresa’s Missionaries of Charity. They are a well-reputed organization who involve in many social services and consists of compassionate people towards every section of society. The Foreign contributions utilized by them help many people. Their motto is in the words of Mother Theresa, “To take care of the hungry, the naked, the homeless, the crippled, the blind, the lepers, all those people who feel unwanted, unloved, uncared for throughout society, people that have become a burden to the society and are shunned by everyone”. Denial of the license for an exemplary organisation that involves in the profession of compassion infers the government’s lake of moral conviction. Not only for the NGOs who provide humanitarian services but also in other fields like education, research, etc.
The Central Government revoked the licenses of some prestigious educational institutions like IIT Delhi, JNU, Hamdard Education Society, DAV college trust and management society, etc. Aforesaid, the fear from the side of the Government regarding the funding as they might develop the anti-nationals with an agenda of vandalism. However, history manifests that all the protests and dissents commence based on the emotions and sentiments of the affected people and have no connection with outsiders. Cancelling such contribution licenses will affect them in terms of finance. There are students who depend on such contributions, the scholarship will get hit and they might not wind up with a high standard of education. Not only students but also researchers, scholars who utilize those contributions for research purposes will be devastated. For example, A panel of researchers in IIT Delhi utilize those contributions for their research and are in half of their exploration path. If those fundings got stopped all their sweat and hard work would be dissipated. When NGOs and Organisations run short of money, the victims would not be the lavisher but the poor and vulnerable.
The Foreign Contribution (Regulation) Act was enacted with the objective of regulating the foreign funding and proper utilization of those funds without any diversion for illegal means. Though the government is clear with its objective it has to look beyond some strains and technicalities. It is deeply hurtful for such impeccable organizations that develop their reputation with sheer determination and commitment. Organizations feel that as they did some sort of crime. Non-compliance with the law is an offense but with some moral considerations, they should have neglected. At least, NGOs who provide humanitarian services should be given leniency for their contribution towards the section of needy.
1 Student at School of Excellence in Law, TNDALU