October 7, 2024   Academy | Blog | Community | Our Philosophy
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Oct 07, 2024  Academy | Blog | Community | Our Philosophy

Voluntary Organisations
Red Book
Red Book

Voluntary Organisations: NGOs, SHGs etc.

This sections will all the issues in Governance related to NGOs, Self Help Groups and Other voluntary organisations contributing to the Social welfare in the country.

Voluntary Organisations updates
  • Significance of Community Efforts in Tackling the Pandemic

    Synopsis: The government should support community efforts in tackling the pandemic. It should recognize the best efforts and help them scale to a bigger level to make a larger impact.

    Background:
    • Firstly, Community efforts have been immensely helpful in tackling social problems as the government or market can’t always meet the needs of citizens.
    • Secondly, In the initial years of independence, community groups collected money and supplemented government efforts for development. However, with the passage of time, they took more institutional forms like NGOs who used to directly help the citizens.
    • Thirdly, India’s ethos, value systems, and cultural strengths have automatically generated new community groups. They are playing an active role in tackling the second wave of pandemic.
    Positive Role played by Community Efforts:
    • Breathe India and HelpNow apps are facilitating access to oxygen concentrators, hospitals, and ambulances. Both the apps have been developed by IITians.
      • BreatheIndia managed to get nearly 200 concentrators and raise an amount of Rs 2.41 crore. 
      • Similarly, HelpNow has a mission to save lives by providing timely and quality medical help with neat and sanitised ambulances.
    Challenges associated with Community Efforts:
    • Firstly, they are facing information asymmetry over various medical equipment and hospital delivery strategies. Which is hampering their efforts. Further, they lack clarity over the ever-changing rules and regulations by governments.
    • Secondly, many NGOs are not able to obtain foreign assistance due to stringent FCRA (Foreign Contribution Regulation Act) restrictions.
    • Thirdly, the dearth of resources and support prevent the scaling up of community initiatives at a macro level.
    Way Forward:
    • NITI Aayog should take multiple steps for supporting community efforts.
      • It should engage with government institutions that encourage public participation.
      • It should look into the weaknesses and failures of the existing framework in attracting community participation. 
        • The use of advanced technologies (ABCD — artificial intelligence, blockchain, cloud computing, and data analytics) can bridge demand-supply gaps.
      • It should partner with state governments to explore the launch of platforms that promote cross-learning and experience-sharing. This would help in scaling the community initiatives and prevent the asymmetric flow of information.
        • The Aayog currently has a DARPAN portal that creates and promotes a healthy partnership between VOs/NGOs and the Government of India.
    • The focus should also be placed on good local-level government initiatives. 
      • For instance, the Nandurbar district of Maharashtra robustly tackled the second wave due to the efficient work of their district collector (Rajendra Bharud). The efforts made the region an oxygen and hospital bed surplus district.
    • The newspapers should report community efforts on a larger scale for motivating people in depressing times.
      • Heart-breaking pictures and reports have contributed to Takotsubo cardiomyopathy. A temporary heart condition that is brought on by stress.

    Source: Indian Express

  • Significance of Citizen-led Fact-Finding Missions
    Synopsis:

    Citizen-led fact-finding missions play a significant role in a democracy. They provide an alternative opinion on things, empower citizens on critical issues and enrich the judicial process.

    Background:
    • Recently, citizen-led fact-finding missions came in the news in a Delhi High Court case pertaining to the North East Delhi riots of 2020. 
      • The solicitor-general of India challenged five fact-finding reports conducted on the riots. 
      • He called such inquiries as examples of self-constituted parallel judicial systems that have no authority in the court of law.
    • However, these missions have been an integral part of Indian and world polity since colonial times.
    Citizen-led fact-finding missions/inquiries in Colonial India:
    • The Champaran Satyagraha of 1917 started as an extensive fact-finding exercise.
      • Gandhi carried out a detailed investigation with a team of volunteers to inquire into the plight of indigo planters. 
      • It was found that they were compelled to grow Indigo and charged with high taxes.
      • This exercise forced the Lieutenant Governor of Bihar to set up a formal inquiry committee with Gandhi as one of its members.
    • The Congress set up a Punjab sub-committee to inquire into the Jallianwala Bagh Massacre of 1919. 
      • The leaders were disappointed with the work and political motivations of the Hunter Commission that was initially set up by the government to investigate the massacre.
    • A fact-finding exercise was undertaken to find out the authenticity of the Kanpur Cotton mills incident of 1924 in which 6 workers were killed and 58 injured. The inquiry exposed the collusion between the mill management and the police.
    Significance of Citizen-led Fact-Finding Missions:
    • Rights Advocacy: It is a tool that helps to do rights advocacy. The process highlights the denial of rights to the target group and demands justice for them.  
    • Enrich the Judicial Process: It complements the judicial process by presenting to it an authentic view of facts. It often lays the groundwork for prosecution if a court of law finds their evidence admissible.
      • For instance, a group of lawyers from the Alternative Law Forum undertook a fact finding study on deaths of several workers in manholes in 2008. 
      • The group submitted a PIL and its report in Karnataka High Court. The court later instructed the Bangalore Water Supply and Sewerage Board to procure manhole cleaning machines. It also issued orders for compensation to the victims’ families.
    • Breed Accountability: They help to highlight the lacunas of government institutions and personnel in fulfilling their duty.
      • For instance, the Andhra Pradesh Civil Rights Committee (APCRC) conducted an enquiry of Naxalite encounters in 1977. The report of the committee induced the government to institute a judicial enquiry under Justice Vashist Bhargava. 
    • Alternative Opinion: They provide citizens a medium to state their side of the story. It would be dangerous if official information was the only information available in the public domain.
      • For instance, people’s tribunals were set up in the wake of the 1992-93 Mumbai riots after the Babri Masjid demolition. They revealed shocking ground realities that were not recorded by the official enquiry committee.  

    Thus, Citizen led fact-finding missions are cost-effective, rapidly mobilised, and encourage civic participation. Due to this, there has been a surge in their numbers in the last few decades. Fact-finding reports should be verified and criticized rather than dismissing them outrightly because these are self-constituted by the citizens.

    Source: indianexpress

  • Gauhati High Court Questions FCRA Amendment Act

    Synopsis: The Gauhati High Court questions the new FCRA Amendment Act.

    Introduction:

    An Assam-based NGO has filed a petition in the Gauhati High Court against an amended provision of the Foreign Contribution (Regulation) Act(FCRA). As the amendment makes Aadhaar mandatory for opening and operating the account in Delhi.

    FCRA Amendment Act, 2020:

    • The FCRA amendment has made it compulsory for the NGOs to open an exclusive Bank account with the State Bank of India in New Delhi to receive foreign donations.
    • The amendments also make it mandatory to provide the Aadhaar details of the chief functionaries, trustees and office-bearers. This is for opening and operating a bank account in Delhi.
    • The Ministry of Home Affairs has given the deadline of March 31st, 2021 to open this bank account.
    • However, if the NGOs failed to open the bank account before the deadline. Then they will not be able to receive fresh foreign funds from April 1,2021 in the existing accounts. But they could utilise the money that already exists in the old account.
    What are the issues with these FCRA Amendments?
    • Several NGOs have filed a petition in the Gauhati High Court. It is against making Aadhaar mandatory for opening and operating the account in Delhi.
    • They have said that they are not able to open bank accounts as they do not fulfil the eligibility criteria (since they don’t have an Aadhaar card).
    • Further, several NGOs have also asked for an exemption from the Union Home Ministry deadline. It is to open an FCRA account with the SBI branch in New Delhi.
    • It said that only 16% of registered NGOs have active bank accounts with the State Bank of India’s main branch in Delhi.
    What has the Gauhati High Court said on FCRA Amendments?
    • The Gauhati High Court has sent a notice to the State Bank of India(SBI) asking it to explain why Aadhaar was necessary to open a bank account.
    • The Court also referred to the 2018 Supreme Court judgement in the K.S. Puttaswamy (Aadhaar) case. During this case, the apex court had ruled that mandatorily linking Aadhaar to a bank account “does not satisfy the Doctrine of proportionality”.

    Note: The Doctrine of proportionality: It is a principle where courts would examine priorities and processes of the administration for reaching or recalling a decision. Proportionality means that the administrative action should not be more drastic than it ought to be for obtaining the desired result. This implies that a missile should not be used to shoot a sparrow. Thus, this doctrine tries to balance means with ends.

     Source: The Hindu

  • Impact of New FCRA Rules on Relief Work of NGOs – Explained, Pointwise
    Introduction

    The second wave of Pandemic has struck the country very hard. There has been an enormous rise in Covid-19 cases reaching around 4 lakh/day. This necessitates active participation from all the stakeholders including NGOs. However, NGOs are not able to contribute much due to the stringent conditions imposed on them by the Foreign Contribution Regulation (Amendment) Act 2020 and Foreign Contribution Regulation (Amendment) Rules 2020.

    There are a lot of donors who are willing to send money/Covid-19 related equipment like ventilators, oxygen cylinders, etc. via NGOs and hospitals. However, the new rules are acting as a big hurdle to them. Christian Educational Society (NGO) has even filed a petition in the High court. It has demanded relaxation against the mandatory opening of an FCRA account at SBI, New Delhi branch. In this article, we will focus on the concerning rules and provide some suggestions for improving the present situation.

    Foreign Contribution (Regulation) Act:
    • It is an act of Parliament enacted in 1976 and amended in 2010. It was to regulate foreign donations and to ensure that such contributions do not adversely affect internal security.
    • Coverage: It is applicable to all associations, groups, and NGOs which intend to receive foreign donations.
    • Registration: It is mandatory for all such NGOs to register themselves under the FCRA. The registration is initially valid for five years. Further, it can be renewed subsequently if they comply with all norms.
    • Registered NGOs can receive foreign contributions for five purposes — social, educational, religious, economic, and cultural. There are 22,591 FCRA registered NGOs.
    Foreign Contribution Regulation (Amendment), Act 2020:
    • Transfer of foreign contribution: Under the Act, foreign contribution cannot be transferred to any other person unless such person is also registered for that purpose.
      • The amendment also forbids sub-granting by NGOs to smaller NGOs who work at the grassroots.
    • FCRA account: The act states that foreign contributions must be received only in an FCRA account opened in the State Bank of India, New Delhi Branch. No funds other than the foreign contribution should be received or deposited in this account.
    • Regulation: The Act states that a person may accept foreign contributions if 
      • They have obtained a certificate of registration from the central government or 
      • They have taken prior permission from the government to accept foreign contributions. 
    • Aadhar usage: The act makes it compulsory for all trustees to register their Aadhaar card with the FCRA account.
      • The Act also makes Aadhaar a mandatory identification document. It is for all the office bearers, directors, and other key functionaries of an NGO.
    • Restriction in utilisation of foreign contribution: The act gives government powers to stop utilization of foreign funds by an organization through a “summary enquiry”.
    • Reduction in use of foreign contribution for administrative purposes: The act decreases administrative expenses through foreign funds by an organization to 20% from 50% earlier.
      • Administrative expenses include salary, office rental, furnishing, stationery, communication, and transport.
    • Surrender of certificate: The act allows the central government to permit a person to surrender their registration certificate.
     Foreign Contribution Regulation (Amendment) Rules 2020:
    • New rules require any organization that wants to register itself under the FCRA to have existed for at least three years. Further, it should have spent a minimum of Rs. 15 lakh on its core activities during the last three financial years for the benefit of society.
    • Office bearers of the NGOs seeking registration under the Foreign Contribution (Regulation) Act must submit a specific commitment letter from the donor. It should indicate the amount of foreign contribution and the purpose for which it is proposed to be given.
    • Any NGO or person making an application for obtaining prior permission to receive foreign funds shall have an FCRA Account.
    Current Scenario:
    • Christian Educational Society (NGO) has filed a plea in Delhi High Court. 
    • It demands an extension of 6 months for the opening of an FCRA account with State Bank of India, New Delhi Branch. 
    • Further, it desires to set aside the restriction on receiving foreign contributions in existing FCRA accounts for 6 months from 1 April 2021.
    • Both the requests are made aimed to smoothen its economic, educational, and social activities.
    • Similarly, on May 3, the government permitted imports without GST levies for pandemic relief material donated from abroad for free distribution in the country. However, no FCRA exemption was granted for this purpose. 
    Issues in implementing the amended rules during the pandemic:
    1. First, there are considerable administrative delays in the functioning of banks and ministries. 
      • For instance, the Christian Educational Society (NGO) had applied to open the account at the SBI Delhi branch before the March 31 deadline. However, the administrative delays prevented the opening. It, later on, filed a petition for a 6-month relaxation.
      • Similarly, in some cases, the Ministry failed to authorize a form sent by the SBI. It, thereby, prevented the eligible NGOs from receiving foreign funds.
    2. Second, NGOs are also facing severe inconvenience in submitting the necessary papers and personal documents of trustees and other members. This inconvenience is created as members live at different locations and various regions are under a lockdown.
      • Due to this, NGOs are not able to receive foreign contribution in their existing non-SBI FCRA account nor are they able to open a primary FCRA account with SBI to receive foreign contribution.
    3. Third, the government has adopted a suspicious stance towards NGOs. They perceive them to be rule breakers by default and take strict action against them. This has resulted in the cancellation of FCRA registration of around 16500 NGOs since 2014.
    4. Fourth, the new rules pay disregard to the successful NGO partnership model across the world. Under this, the focus is placed on establishing a synergy between urban and hinterland regions. 
      • Urban professionals are better trained to raise funds, lobby with the government for policy changes, grants, etc. On the other hand, field workers are better acquainted with ground conditions, people, and their culture and issues at the local level. 
    Impact of stricter rules:
    1. Firstly, the NGOs are spending more time doing paperwork than on the ground. This has reduced the ambit of development works carried on by them.
      • Covid 19 relief work, Community work involving awareness building, legal and constitutional literacy, participatory research, etc. have been hit by the new rules.
    2. Secondly, Indian entities (including hospitals and charitable trusts) can’t receive COVID-19 relief material from foreign donors. Unless they are registered under the Foreign Contribution Regulation Act (FCRA) with a stated objective involving the provision of medical care.
      • This has jeopardized some large donors’ plans to buy equipment like oxygen plants and concentrators for Indian hospitals and smaller charities.
    3. Thirdly, the new rules have enhanced compliance formalities which have made it very difficult to run an NGO. This has resulted in the closure of many NGOs and the livelihood loss of people working in them.
      • For instance, the capping of administrative expenditure at 20% has made them unviable. This is especially true for NGOs hiring professionals like lawyers and doctors who charge hefty fees for their services.
    4. Fourthly, the new rules have made ‘sub granting illegal. Due to this, big NGOs based in Delhi or Mumbai are not able to subgrant their foreign funds to implement programs via partner organizations in districts and villages.
    Suggestions:
    • The government should issue a clarification on exempting the receiver/importer of Covid related material from complying with the FCRA provisions.
    • The Delhi high court should give a quick decision over the request for a 6-month extension on the 31st March 2021 deadline for opening an FCRA account at SBI, New Delhi.
    • The government should adopt a liberal stance towards the NGOs. They must be allowed grace periods to file papers or other documents rather than outrightly canceling their registration for non-compliance.
    • Further, the state governments should set up an NGO coordination center at the local level as recommended by National Disaster Management Authority (NDMA).
    Conclusion

    Civil society supplements government works and works at the grass-roots level. They should be given due freedom and autonomy to support the needs of communities and provide relief during the COVID-19 pandemic.

  • FCRA Amendments are Crippling Work of NGOs
    What is the News?

    The FCRA (Foreign Contribution Regulation Amendment) Act, 2020 has affected the work of many NGOs. They are facing difficulties in receiving foreign funds.

    FCRA Amendment Act, 2020:
    • The amendment has made it compulsory for the NGOs to open an exclusive Bank account with the State Bank of India in New Delhi to receive foreign donations.
    • The Ministry of Home Affairs had given the deadline of March 31st, 2021 to open this bank account.
    What is the issue with this amendment?
    • Firstly, a was petition filed in the Delhi High Court seeking exemption from the Union Home Ministry’s March 31 deadline to open an FCRA account with the SBI branch in New Delhi.
    • Secondly, the petitioner argued that it had applied to open the account before the March 31 deadline.
    • Thirdly, the administrative delays in approval by the bank and Ministry severely are causing many troubles for them. It restricted activities of NGOs including providing COVID-19 relief and paying urgent salaries of staff, and also affected its charitable and educational activities.
    • Hence, the Delhi High Court has now issued a notice to Union Home Ministry for a reply.
     About FCRA (Foreign Contribution Regulation Act):
    • Foreign Contribution (Regulation) Act is an act of Parliament enacted in 1976 and amended in 2010 to regulate foreign donations. It aimed to ensure that such contributions do not adversely affect internal security.
    • Coverage: It is applicable to all associations, groups, and NGOs which intend to receive foreign donations.
    • Registration: An FCRA registration is mandatory for NGOs to receive foreign funds.
    • Purpose: Registered NGOs can receive foreign contributions for five purposes — social, educational, religious, economic and cultural.

    Click Here to Read about FCRA

    Source: The Hindu

     

     

    https://forumias.com/blog/indian-polity-news/voluntary-organisations/

  • A Case for State repression on Civil societies

    Synopsis: Telangana government’s decision to ban 16 civil organisations is an act of state repression on citizens demanding state accountability.

    Background
    • Recently, The Government of Telangana banned 16 organisations under the Telangana Public Security Act, 1992 (TPSA).
    • These 16 organizations include workers’ organisation, women’s groups, students’ groups, Adivasi association groups, and civil liberties groups.
    • They were declared as ‘unlawful associations’ and ‘new front organisations linked to Communist Party of India (Maoist) and urban guerillas.
    • The timing of this notification indicates that the government wants to scare people demanding governmental accountability.
    What led to the ban on these organisations?
    1. The activists were involved in highlighting various issues against the State and Central Governments through meetings and rallies.
    2. Besides, they were also demanding the release of leaders who were arrested in the Bhima Koregaon case, and ‘repealing of UAPA Act, Farm Laws, CAA/NRC’.
    3. However, the state labeled the following charges against the activists to invoke a ban on these organizations, under Telangana Public Security Act, 1992.
      1. One, activists are invading urban areas by adopting various guerilla tactics to wage war against the state.
      2. Two, they were interfering with the public administration. Or the maintenance of supplies and services essential to the life of the community. It amounts to a  danger to public peace.

    Why the ban on these organisations is viewed as a misuse of the Telangana Public Security Act, 1992?

    • First, protesting against the UAPA or seeking its repeal cannot in itself be interpreted as an unlawful activity. The Unlawful Activities (Prevention) Act, or UAPA, is widely challenged in many courts due to its infringement on the fundamental rights of the citizens.
    • Second, Since the investigations are ongoing, supporting the release of Bhima Koregaon accused cannot be framed as a crime under the TPSA.
    • Third, protesting against CAA and farm laws also cannot be dubbed as an unlawful activity.
        • Because the state government itself has not taken a definite stand on the issue of Farm laws.
        • More interestingly, the State Legislature had itself passed a resolution against the CAA, the National Register of Citizens (NRC), and the National Population Register.
        • The resolution stated that the CAA violated the constitutional guarantees of equality, non-discrimination, and secularism. Further, it will endanger the lives of vulnerable groups who do not possess adequate documentary proof of citizenship.
    Way forward
    • Telangana state performance to control the Pandemic has been so far very poor. Even the Telangana high court has criticised the state’s response to control the Pandemic as disappointing and failure in governance.
    • Hence, the government should strive towards fulfilling its constitutional obligations under Part IV of the Constitution by effectively managing the public health crisis.

    Source: The Hindu

  • Union Minister inaugurates “Saras Aajeevika Mela 2021”

    What is the News?

    Union Minister for Rural Development has inaugurated Saras Aajeevika Mela 2021.

    Saras Aajeevika Mela:

    • Nodal Ministry: It is an initiative of the Ministry of Rural Development. This initiative is a part of the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM).
    • Organized by: Council for Advancement of People’s Action and Rural Technology (CAPART).
      • CAPART: It is an autonomous body. It was established in 1986 by the Ministry of Rural Development. CAPART co-coordinates the partnership between Voluntary Organizations and the Government for sustainable development of rural areas.
    • Objective: Mela will bring the rural women Self Help Groups(SHGs) under one platform. By that, SHGs will be able to showcase their skills and sell their products.
    • Moreover, these rural SHG women will get vital national-level exposure to understand the demand and taste of urban customers.

    Deendayal Antyodaya Yojana -National Rural Livelihoods Mission (DAY-NRLM)

    • Type: Centrally Sponsored Scheme
    • Launched in: It was launched by the Ministry of Rural Development (MoRD) in 2011 as a restructured version of Swarna Jayanti Gram Swarozgar Yojna(SGSY).
      • In 2015, the program was renamed as Deendayal Antayodaya Yojana(DAY-NRLM).
    • Objective: It looks to create efficient and effective institutional platforms for the rural poor. It will enable SHGs to increase household income through sustainable livelihood enhancements and improved access to financial services.
    • World Bank Support: The mission is aided in part through investment support by the World Bank.
    • Target: The mission has set out an agenda to cover 7 Crore rural poor households through self-managed Self Help Groups(SHGs) and federated institutions. It will support them for livelihoods collectives in a period of 8-10 years.

    Features of DAY-NRLM:

    • Social Mobilization: It will bring at least one woman member from each identified rural poor household, under the Self Help Group (SHG) network in a time-bound manner. Special emphasis is, particularly on vulnerable communities.
    • Community Institutions: The Mission involves working with community institutions through community professionals to promote self-help.
    • Financial Inclusion – The mission works on both the demand and supply sides of financial inclusion. On the demand side, it promotes financial literacy among the poor and provides capital to the SHGs. On the supply side, it coordinates with the financial sector to encourage the use of financial technologies.
    • Convergence: The mission places a high emphasis on convergence with other programs of the MoRD and other Central Ministries. Convergence is also sought with programs of state governments for developing synergies directly or indirectly with institutions of the poor.

    Source: PIB

     

    [Answered]What are self help groups? Discuss various socio-cultural hurdles faced by Self Help Groups (SHGs) in promoting increased participation in development programmes.

  • Govt. releases new guidelines for banks under “Foreign Contribution (Regulation) Act”

    What is the News?
    Union Home Ministry has announced new guidelines for banks, under the Foreign Contribution (Regulation) Act. These guidelines are related to the donations received by non-governmental organizations (NGOs) and associations.

    What are the new FCRA guidelines?

    1. The donations received in Indian rupees by the NGOs and associations from any foreign source should be treated as a foreign contribution. Even if that source is located in India at the time of such donation.
    2. It will include the contributions by foreigners of Indian origin like OCI or PIO cardholders, in Indian rupees(INR).
    3. As per the existing rules, Banks need to report any receipt or utilization of any foreign contribution, by any NGO, association, or person. Banks should submit these reports to the Central government within 48 hours.
    4. Rules cover all NGOs, whether they are registered or granted prior permission under the FCRA.
    5. Any violation by the NGO or by the bank of these rules of FCRA may invite penal provisions under the FCRA Act, 2010.

    Foreign Contribution (Regulation) Act:

    • FCRA was enacted in 1976 and amended in 2010. It regulates foreign donations and ensures that such contributions do not adversely affect internal security.
    • Coverage: It is applicable to all associations, groups, and NGOs which intend to receive foreign donations.
    • Exemption: Members of the legislature and political parties, government officials, judges, and media persons are prohibited from receiving any foreign contribution.
      • However, in 2017 the FCRA was amended through the Finance Bill. This amendment allowed political parties to receive funds from,
        1. The Indian subsidiary of a foreign company or
        2. A foreign company, in which an Indian holds 50% or more shares.
    • Registration: It is mandatory for all such NGOs to register themselves under the FCRA. The registration is initially valid for five years, and it can be renewed subsequently if they comply with all norms.
    • Amendment of FCRA Rules: In September 2020, the FCRA Act was amended by Parliament and a new provision was added. It makes it mandatory for all NGOs to receive foreign funds in a designated bank account at the State Bank of India (SBI) New Delhi branch.

    Source: The Hindu

  • NEW FCRA RULES AND ITS BACKGROUND | 12th NOV., 2020

    Context: Foreign Contribution Regulation rules, 2011 have been amended by the Ministry of Home Affairs (MHA) with the notification of new FCRA rules.

    • New rules require any organization that wants to register itself under the FCRA to have existed for at least three years.
    • should have spent a minimum of Rs. 15 lakh on its core activities during the last three financial years for the benefit of society.
    • Office bearers of the NGOs seeking registration under the Foreign Contribution (Regulation) Act must submit a specific commitment letter from the donor indicating the amount of foreign contribution and the purpose for which it is proposed to be given.
    • Any NGO or person making an application for obtaining prior permission to receive foreign funds shall have an FCRA Account.

    What is FCRA (Foreign Contribution Regulation Act)?

    • Foreign Contribution (Regulation) Act: It is an act of Parliament enacted in 1976 and amended in 2010 to regulate foreign donations and to ensure that such contributions do not adversely affect internal security.
    • Coverage: It is applicable to all associations, groups, and NGOs which intend to receive foreign donations.
    • Who cannot receive foreign donations?
      • Members of the legislature and political parties, government officials, judges, and media persons are prohibited from receiving any foreign contribution.
      • However, in 2017 the FCRA was amended through the Finance Bill to allow political parties to receive funds from the Indian subsidiary of a foreign company or a foreign company in which an Indian holds 50% or more shares.
    • Registration: It is mandatory for all such NGOs to register themselves under the FCRA. The registration is initially valid for five years and it can be renewed subsequently if they comply with all norms.
    • Purpose of Foreign contribution: Registered associations can receive foreign contributions for social, educational, religious, economic, and cultural purposes. The filing of annual returns on the lines of Income Tax is compulsory.
    • Ministry of Home Affairs (MHA) New Rules:
      • In 2015, the MHA notified new rules which required NGOs to give an undertaking that the acceptance of foreign funds is not likely to prejudicially affect the sovereignty and integrity of India or impact friendly relations with any foreign state and does not disrupt communal harmony.
      • It also said all such NGOs would have to operate accounts in either nationalized or private banks which have core banking facilities to allow security agencies access on a real-time basis.

    Key provisions of FCR(Amendment), Act 2020:

    • Prohibition to accept foreign contribution:
      • Include certain public servants in the prohibited category for accepting foreign contribution: These include: election candidates, editor or publisher of a newspaper, judges, government servants, members of any legislature, and political parties.
      • The Bill adds public servants to this list. Public servant includes any person who is in service or pay of the government or remunerated by the government for the performance of any public duty.
    • Transfer of foreign contribution: Under the Act, foreign contribution cannot be transferred to any other person unless such person is also registered to accept foreign contribution.
    • FCRA account: The Bill states that foreign contribution must be received only in an account designated by the bank as FCRA account in such branches of the State Bank of India, New Delhi. No funds other than the foreign contribution should be received or deposited in this account.
    • Definition of persons: The FCRA 2010 allows the transfer of foreign contributions to persons registered to accept foreign contributions. The term ‘person’ under the Bill includes an individual, an association, or a registered company.
    • Regulation: The Act states that a person may accept foreign contributions if they have obtained a certificate of registration from the central government or obtained prior permission from the government to accept foreign contribution. The bill makes Aadhaar mandatory for registration.
    • Restriction in utilisation of foreign contribution: The Bill gives government powers to stop utilisation of foreign funds by an organization through a “summary enquiry”.
    • Reduction in use of foreign contribution for administrative purposes: The bill decreases administrative expenses through foreign funds by an organisation to 20% from 50% earlier.
    • Surrender of certificate: The Bill allows the central government to permit a person to surrender their registration certificate.

    Need for such amendments:

    • To monitor Misuse of funds: In Parliament, the government alleged that foreign money was being used for religious conversions. For instance, in 2017, the government barred American Christian charity, Compassion International.
    • To prevent loss to the GDP: An official report quantifying the GDP losses allegedly caused by environmental NGOs was prepared during the NPA period, indicating a foreign conspiracy against India.
    • To enhance transparency and accountability: The annual inflow of foreign contribution has almost doubled between the years 2010 and 2019, but many recipients of foreign contribution have not utilised the same for the purpose for which they were registered or granted prior permission under the said Act.
    • To regulate NGO’s: Many persons were not adhering to statutory compliances such as submission of annual returns and maintenance of proper accounts.

    Concerns associated with the recent amendments

    • Over-regulation of NGO: New regulations put excessive conditions on civil society organizations, and educational and research institutions that have partnerships with foreign entities.
    • Lack of Consensus: The amendments were not discussed with the stakeholder and passed with limited discussion in Parliament.
    • Against Constitutional rights: According to the International Commission of Jurists, the new law is incompatible with international obligations and India’s own constitutional provisions on rights.
    • Incompatible with international laws: The United Nations Human Rights Council resolution on protecting human rights defenders says that no law should criminalize or delegitimize activities in defense of human rights on account of the origin of funding.
    • Discourage social work: Thousands of NGOs serve extremely disadvantaged sections. Only presumption of guilt against them all, followed by control, restricts their scope of voluntary actions.
    • Selective barriers: The over-regulation appears to be towards selected categories of global ideas and ideals such as environmentalism, human rights, and civil liberties.
    • Reduce investments and technology flow: As a growing economy, India has been proactive in seeking global capital and technology. Strict rules governing FCRA will impact investments.
    • Against Indian cultural ethos: Prime Minister has often cited the ancient Indian ethos of Vasudhaiva Kutumbakam as the framework for its global engagement. New rules do not go well with India’s legitimate ambitions to be a global player.
    • Additional cost of compliance: Every FCRA-registered NGO will have to open an FCRA-marked bank account with a designated branch of State Bank of India in New Delhi. Around 93% of FCRA NGOs are registered outside Delhi, and will now have to open a bank account in the capital.
    • Lowering the cap on administrative expenses: The micro-management and cost structures vary from project to project. It is difficult for NGOs whose work revolves around advocacy rather than projects. In 2018-19, there were 1,328 NGOs whose administrative expenses exceeded 20% of their total foreign funds.

    What can be the way forward?

    • Delink religious propagation and conversions from the question of foreign funding.
    • There are adequate laws against conversion by inducement. It cannot be decided against the touchstone of the source of funds, native or foreign.
    • Seamless sharing of ideas and resources across national boundaries is essential to the functioning of a global community.
    • The government must commit itself to the ancient Indian ethos of Vasudhaiva Kutumbakam as the framework for its global engagement and should not be hostile against the NGOs who criticize the government for their work.

    Civil society’s supplements government works and works at the grass-root level. Civil societies should not be discouraged unless there is reason to believe the funds are being used to aid illegal activities.

  • FCRA 2010 to 2020: Foreign Contribution (Regulation) Act evolution

    In News: Recently, Foreign Contribution Regulation (Amendment) Bill 2020 was introduced in the Lok Sabha. The Bill amends the Foreign Contribution (Regulation) Act, 2010.

    What is FCRA?

    • Foreign Contribution (Regulation) Act: It is an act of Parliament enacted in 1976 and amended in 2010 to regulate foreign donations and to ensure that such contributions do not adversely affect internal security.
    • Coverage: It is applicable to all associations, groups and NGOs which intend to receive foreign donations.
    • Who cannot receive foreign donations?
      • Members of the legislature and political parties, government officials, judges and media persons are prohibited from receiving any foreign contribution.
      • However, in 2017 the FCRA was amended through the Finance Bill to allow political parties to receive funds from the Indian subsidiary of a foreign company or a foreign company in which an Indian holds 50% or more shares.
    • Registration: It is mandatory for all such NGOs to register themselves under the FCRA. The registration is initially valid for five years and it can be renewed subsequently if they comply with all norms.
    • Purpose of Foreign contribution: Registered associations can receive foreign contributions for social, educational, religious, economic and cultural purposes. Filing of annual returns on the lines of Income Tax is compulsory.
    • Ministry of Home Affairs (MHA) New Rules:
      • In 2015, the MHA notified new rules which required NGOs to give an undertaking that the acceptance of foreign funds is not likely to prejudicially affect the sovereignty and integrity of India or impact friendly relations with any foreign state and does not disrupt communal harmony.
      • It also said all such NGOs would have to operate accounts in either nationalised or private banks which have core banking facilities to allow security agencies access on a real time basis.

    Key provisions of Foreign Contribution Regulation (Amendment) Bill 2020:

    • Prohibition to accept foreign contribution:
      • Include certain public servants in the prohibited category for accepting foreign contribution: These include: election candidates, editor or publisher of a newspaper, judges, government servants, members of any legislature, and political parties.
      • The Bill adds public servants to this list. Public servant includes any person who is in service or pay of the government, or remunerated by the government for the performance of any public duty.
    • Transfer of foreign contribution: Under the Act, foreign contribution cannot be transferred to any other person unless such person is also registered to accept foreign contribution.
    • FCRA account: The Bill states that foreign contribution must be received only in an account designated by the bank as FCRA account in such branches of the State Bank of India, New Delhi. No funds other than the foreign contribution should be received or deposited in this account.
    • Definition of persons: The FCRA 2010 allows transfer of foreign contributions to persons registered to accept foreign contributions. The term ‘person’ under the Bill includes an individual, an association, or a registered company.
    • Regulation: The Act states that a person may accept foreign contribution if they have obtained a certificate of registration from central government or obtained prior permission from the government to accept foreign contribution. The bill makes Aadhaar mandatory for registration.
    • Restriction in utilisation of foreign contribution: The Bill gives government powers to stop utilisation of foreign funds by an organisation through a “summary enquiry”.
    • Reduction in use of foreign contribution for administrative purposes: The bill decreases administrative expenses through foreign funds by an organisation to 20% from 50% earlier.
    • Surrender of certificate: The Bill allows the central government to permit a person to surrender their registration certificate.

    Need for such amendments:

    • To monitor Misuse of funds: In Parliament, the government alleged that foreign money was being used for religious conversions. For instance, in 2017, the government barred American Christian charity, Compassion International.
    • To prevent loss to the GDP: An official report quantifying the GDP losses allegedly caused by environmental NGOs was prepared during NPA period, indicating a foreign conspiracy against India.
    • To enhance transparency and accountability: The annual inflow of foreign contribution has almost doubled between the years 2010 and 2019, but many recipients of foreign contribution have not utilised the same for the purpose for which they were registered or granted prior permission under the said Act.
    • To regulate NGO’s: Many persons were not adhering to statutory compliances such as submission of annual returns and maintenance of proper accounts.
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