Squeeze on funds cripples NGO sector

Robust non-governmental organisations are an essential part of healthy modern societies. They perform useful functions such as supplementing governmental efforts on the social front and raising the red flag when there are undesirable developments.

India is witnessing a steep decline in NGO activity, primarily due to governmental measures which have choked their sources of funds.

Last Friday about 6,000 NGOs became ineligible to receive donations from abroad in terms of the Foreign Contribution (Regulation) Act (FCRA).

Indian NGOs have always found it difficult to attract donations from within the country for their activities. One reason is that the business community does not have a strong tradition of charitable activity except to fulfil religious    obligations.

The law allows companies to use a specified percentage of their profits to fulfil what is referred to as “corporate social responsibility”, or CSR. Very little of it ever reached NGOs. This is because many NGOs are seen as engaged in activities governments at the Centre and in the states consider as hostile. Which businessman will risk inviting the displeasure of the authorities?

When Covid-19 struck, the Centre quietly persuaded the large corporates to divert their CSR funds to a new fund Prime Minister Narendra Modi created to fight the pandemic. It is known as “PM CARES Fund” but is outside the Central government’s control.

FCRA was enacted in 2010 by the second United Progressive Alliance government to check the intrusion of undesirable foreign elements in the role of financiers of NGOs.

In September 2020, the Modi administration amended the law to make it more stringent. One of the new provisions gave the Centre the power to hold a “summary enquiry” to check misuse of foreign donations.

Indian NGOs as well as foreign-based ones working in the country have encountered many obstacles under the Modi regime. The earliest to come under watch was human rights defender Teesta Setalvad, Founder Secretary of Citizens for Justice and Peace. She was instrumental in initiating some criminal cases in connection with the communal riots that had taken place in Gujarat in 2002 when Modi was the state’s Chief Minister.

Choked of foreign funds, Greenpeace, which was active inn environment-related campaigns in India, cut short its activities to what it can do with local contributions.

Amnesty International sought to bring in funds for the work of its India chapter in the form of foreign direct investment. The government said the FDI route was not open to non-profit entities.

Amnesty stopped all activities in India in September 2020 [BB1] when the Centre froze its bank accounts, and it could not pay salaries to its staff.

The action against Amnesty came soon after it released repots on rights violations in Kashmir and riot-hit North Delhi.

The government’s selective actions against NGOs have had a chilling effect. Human rights organisations which sprang up in the wake of Indira Gandhi’s Emergency rule are now generally inactive.  

The government said the action against Amnesty was in keeping with the policy of not allowing interference by foreign-funded entities in domestic political debates.

Last year the government asked NGOs which were receiving foreign donations to apply for renewal of FCRA registration before December 31. As many as 5,789 NGOs did not apply and 179 which applied were denied registration.

Oxfam India and Mother Teresa’s Missionaries of Charity are among those that were refused registration. Both had been working among the country’s poor since long.

The re-registration process brought down the number of NGOs entitled to receive foreign donations from 18,778 last year to 12,989 this year.

Pushpa Sundar, a development specialist, pointed out in a newspaper article that the government expects NGOs to pitch in and make a success of its social sector programmes but is niggardly in giving them grants. Instead of helping them, it is obstructing their attempts to raise money from other sources, both foreign and domestic.

Ms Sundar presented a picture of how the regime has been choking NGOs’ sources of funding.

She said between 2014 and 2019 the Modi government cancelled the FCRA registration of about 16,000 NGOs. In 2015-16, NGOs received Rs177.73 billion from abroad. In 2016-17 foreign donations shrank to Rs 64.99 billion.

The Prime Minister must take a balanced view of the role of NGOs in a modern society and ensure that they are not squeezed out.