Liberalize the funding of non-profit ventures

News:  Non-profit Organisations are subjected to strict norms in India.

How strict regulations for NGOs is affecting their survivability?

In 2015, The Centre amended the Foreign Contribution (Regulation) Act, to require the renewal of non-profit funding permits every five years. This led to delicensing of many NGO’s. For instance, in 2015 and 2017, over 15,000 entities had lost their FCRA registration.

In 2020, the revised FCRA norms altered the functioning of NGOs further. The following conditions are enforced upon the NGOs:

– Overseas funds to NGOs should be deposited only into accounts held with the State Bank of India’s main branch in Delhi.

– No subcontract jobs can be farmed out.

– Expense sheets should be submitted four times a year to show administrative costs no higher than 20% of their foreign intake.

Consequence

1. The reduction of this cap from 50% earlier has impacted the financial capacities of many NGOs.

2. Further, 6,000 privately-run non-profit organizations across India lost their licenses for foreign funding.

3. Moreover, Strict norms have resulted in delicensing of many NGOs. For instance, Recently, Mother Teresa’s Missionaries of Charity, Oxfam, and Indian Medical Association lost their permit for an alleged failure to meet renewal conditions.

Source: This post is based on the article “Liberalize the funding of non-profit ventures” published in Live Mint on 7^th Jan 2022.