Lakshman Yeme saw firsthand what happens when foreign funds are cut off under laws the Indian government says are meant to crack down on corruption but that critics say hurt the poorest most.
Yeme works as a doctor at a hospital in Anjanwel in the coastal region of Maharashtra, and for years, he toiled almost alone in a poorly equipped, nearly empty building.
Three years ago, the Bombay Sarvodaya Friendship Centre, a Mumbai-based nonprofit, came to his rescue, building an operating theatre, paying for extra staff and subsidising surgeries.
But the Bombay Sarvodaya Friendship Centre’s licence to receive funds from foreign donors expired in October 2021 and since then it has not been able to renew it.
Overnight, its activities collapsed, and Yeme found himself back at square one.
“The operation theatre has stopped functioning entirely and even the doctors, who were coming here to see patients, have stopped coming,” he said.
Today, the hospital cuts a sorry sight – beds are empty, the X-ray room and operating theatre are shut, chairs are covered in dust and the paint is peeling from the rain-drenched walls.
Thousands of civil society groups in India have had their licences to receive overseas donations cancelled since Prime Minister Narendra Modi’s government tightened surveillance on non-profit groups regulated under the Foreign Contribution Regulation Act, or FCRA.
The government has said alleged irregularities on the part of nonprofits were to blame, but civil society activists said the cancellations were part of a larger crackdown to stifle criticism of the government.
The list of those affected includes Oxfam, Amnesty International and World Vision as well as reputed think tanks like the Centre for Policy Research, which had its licence cancelled in January.
Modi’s government has said the rule changes were needed to beef up accountability for the receipt and use of foreign funding because few of the more than 230,000 registered non-profits met basic statutory requirements or used the funds properly.
For the Bombay Sarvodaya Friendship Centre, the damage rippled out beyond Anjanwel.
“We had to cut our staff strength from 30 to about seven people; our programmes had to be discontinued,” said Anil Hebbar, Bombay Sarvodaya Friendship Centre’s trustee, in a phone interview with Context.
According to the government’s FCRA dashboard, only 15,947 nonprofits with an FCRA licence are still active – the permissions for 35,488 nonprofits have either been cancelled or have expired and not been renewed.
This has left many organisations struggling to survive and left some of the most vulnerable in this nation of 1.4 billion lacking vital services.
Mukta Naik, a fellow at the Centre for Policy Research, which had its licence cancelled, said the nonprofit sector was filled with uncertainty about what might be considered “subversive” in the future and were tending to lean towards working with government-backed projects.
She said the government should not seek to control the important sector.
“Civil society can be an important ally, it is a space for governments to understand what people really want.”
India’s Ministry of Home Affairs did not respond to several emails requesting comment.
Funding choked
The FCRA dates from 1976, a time of national emergency declared by Indira Gandhi, the prime minister then, who was seen as using the law to target critics of a civil rights clampdown.
In 2020, the regulations were tightened to include a ban on nonprofits transferring money from overseas contributions to other nonprofits with similar licences and imposed a spending limit of 20% on administrative costs such as staff and offices.
“Many grassroots organisations, that had the FCRA licence but didn’t have fundraising capabilities, would depend on larger organisations for their funding,” said Avinash Kumar, the former head of Amnesty India, who left after the organisation shut down operations in India in 2020 after the government alleged it had committed FCRA violations.
Kumar said the 2020 amendment meant funding for grassroots organisations was completely “choked”.
Following Modi's re-election in this year’s vote, civil society actors fear the crackdown will continue.
According to Swedish V-Dem Institute data, India’s civil society participation index has shown a drastic fall, from 0.84 in 2013, to 0.61 in 2023, the lowest it has been in 47 years.
Already, many nonprofits have either shut up shop entirely or been reduced to bare-bones operations, with many people losing their jobs as a result.
Staff suffer
Meenakshi, a 39-year-old social worker who only gave her first name, is among the thousands left without work.
She was an urban coordinator for a New Delhi-based nonprofit for 14 years, working in the city’s informal settlements.
Her job was vital – to the people she served but also to her own family. Her husband died young and she had struggled to raise her two children on her own.
But in March, the government revoked the licences of five nonprofits to accept foreign donations, including Meenakshi’s employer.
Her organisation collapsed – another employee, speaking on condition of anonymity, said 220 people out of a total staff of 250 were made redundant immediately. Including Meenakshi.
“I have two teenage children whose education I need to fund, and it is getting harder to do so, each month,” she said.
She managed to get a temporary job at a hardware store in Delhi but her salary is now only Rs 5,000 compared to nearly Rs 45,000 when she worked at the nonprofit.
But she knows she is lucky to have a job in a country where unemployment was a top concern for voters this year.
In Anjanwel, people now face a 50-km drive to the nearest medical centre.
“Just yesterday, we had a bike accident here, where two people injured their legs,” said Yeme in late June. He was unable to X-ray the injured because he no longer has the funds to operate his X-ray machine.
“We had to turn the patients away and send them to the nearest medical centre with an X-ray, 75 minutes away.”
This article first appeared on Context, powered by the Thomson Reuters Foundation.
Also read:
FCRA licence of Centre for Financial Accountability cancelled, non-profit claims political targeting
Everything you need to know about FCRA, the law that regulates foreign donations to NGOs
FCRA licence crackdown has plunged India’s non-profit sector into a crisis
