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There have been concerns related to foreign funding to NGOs in India. In this context, examine the current framework regulating the same.

Approach:

• Give a brief introduction about current clampdown on NGOs, which are receiving foreign funding.
• Highlight the concerns related to foreign funding to NGOs.
• Provide information about the FCRA framework regulating the foreign funding of NGOs and discuss its needs and issues with it.
• Briefly present an appropriate conclusion with a way forward.

Answer:

One of the most contentious concerns for governments in many nations has been foreign funding for NGOs. In India, approximately 18,000 NGOs have had their licence to accept donations from outside revoked over the course of the last six years.

Concerns related to foreign funding to NGOs:

• Obstruction to development: Many foreign-funded NGO’s intend to obstruct developmental operations, according to an IB investigation. As an illustration, Greenpeace India organises demonstrations against the use of thermal, nuclear, coal, and aluminium mining. According to the paper, such blocking has a detrimental economic impact of between 2 and 3 percent of the GDP annually.
• Ulterior motives: Foreign aid is mostly determined by factors such as trade and international relations and not development and welfare as such. For e.g., the protests against Kudankulam Nuclear Power Plant exposed deeper connections between protesting NGOs and foreign funds from US-based donors.
• Lack of transparency regarding funds received: Many NGOs receiving foreign contributions often fail to submit their annual returns and completed balance sheets on time.
• Inadequate local support: More foreign assistance leads to the lack of local resources

mobilisation by NGOs and also, contradicts the idea of self-reliance.

Regulatory framework for foreign funding of NGOs:

The foreign contribution to NGOs is regulated under the Foreign Contribution Regulation Act

(FCRA), 2010. This act:

• regulates the licensing requirements, spending of funds received towards administrative expenses, validation of their bank accounts, non-involvement in any act of religious conversion or communal disharmony etc.
• prohibits acceptance and use of foreign contribution or hospitality by a specified category of persons such as a candidate for election, judge, journalist etc.
• prescribes a mechanism to accept, use and report usage of foreign funds to NGO’s.

Hence, by regulating the acceptance and use of foreign funds, the FCRA seeks to uphold the sovereignty and integrity of India; promote public interest; ensure freedom or fairness of election to any Legislature. However, there are various issues with the act:

• Aversion to dissent: The inclusion of cartoonists in the list proscribing acceptance of foreign funds and the usage of term ‘organisations of political nature’, suggests the intention of curbing political dissent.
• Disproportionate penalisation: Over 18,000 NGOs have lost their FCRA license owing to

various trivial issues like not submitting annual reports, not intimating the change of key

personnel etc., which seems disproportionate penalisation.

• Overregulation: FCRA rules give the state excessive discretionary powers to apply the

provision in an arbitrary manner and affects development process adversely.

• Non-conformity to international standards: Access to resources, particularly foreign funding is part of the right to freedom of association. This right is incorporated under the International Covenant on Civil and Political Rights to which India is a party.

Although the FCRA is rife with the aforementioned problems, it is impossible to ignore the industry’s lack of transparency and accountability as well as charges of corruption. Government must establish a fair regulatory structure that aims to streamline processes, prevent fraud, and efficiently oversee the imposition of sanctions. The NGOs should conduct themselves ethically.

Additionally, volunteer self-regulation can support formal regulation.