The Voluntary Action Network India, an association of non-governmental organisations in the country, on Monday said that the amendments to the Foreign Contribution Regulation Act, or FCRA, would be a “death blow” for non-profit units.
The Centre on Sunday tabled amendments to the Foreign Contribution Regulation Act, or FCRA, in the Lok Sabha, making Aadhaar mandatory for all office bearers of NGOs that seek foreign contributions. The proposed stringent amendments also seek to bar public servants from receiving foreign funding. The Lok Sabha passed the bill on Monday.
The bill reasons there is a need to strengthen the Act because of several organisations’ “outright misappropriation or mis-utilisation” of the funds, which has led to the government cancelling 19,000 such registrations in the past few years.
“The new FCRA Bill throttles the spirit of cooperation that had been ushered in earlier this year by the positive role played by development organizations in mitigating the lockdown and COVID-19 pandemic by virtually making it impossible for NGOs to function,” the association said in a statement. VANI noted that in the current Covid-19 scenario, the draft legislation stifled the functioning of the important sector.
The statement added that the amendments assumed that all NGOs accepting foreign funds are “guilty, unless proved otherwise”. It added that the draft law makes organisations susceptible to harassment through queries on any of its activities. “This would impede collaborations and any other constructive activity they do,” the association said.
VANI’s statement pointed out that the amendments to the FCRA will kill the “overall spirit of collaboration” as the bill does not allow sub-granting or transferring of funds received from one NGO to another.
The association noted the curb on using the funds as administrative expenses and said that the amendment will take a toll on organisations in salary payments, professional fees, and utilities, etc. The FCRA mandates that those receiving foreign contribution must use it only for the reason for which the contribution has been received. However, the bill reduces this limit to 20% from 50%.
The association supported the government’s efforts to crack down on dubious charitable activities, but said that it had failed to recognise the diversity of NGOs. Moreover, it said that asking 20,000 charities to switch their FCRA accounts to State Bank of India, Delhi, will be disruptive.
The bill states that the bank’s branch would then report to the home ministry the prescribed amount of foreign remittance, the sources and manner in which it was received and other particulars.
“With limited domestic philanthropy, such guidelines that criminalise activities of even those certified as FCRA compliant, thousands of small NGOs which enable good work and are dependent on legal funds obtained internationally, will shut down, also endangering livelihoods of those dependent on them for a vocation,” the statement concluded.