India – NGO’s Face Permit Bans regarding Licenses & Foreign Funds
Author: Administrator
Date: January 27, 2022
Photo by: Pacific Press Media Production Corp. / Alamy via Reuters
By Kunal Purohit // 13 January 2022
For India’s nonprofit sector, the new year has been a harbinger of grim news and a reminder of old struggles.
Making use of a controversial law criticized by the UN Human Rights office, the Indian government in early January stripped nearly 6,000 NGOs of their permits needed to accept funding from overseas donors.
India’s Ministry of Home Affairs said that while it had canceled the licenses of some NGOs for violations of laws that regulate foreign donations, most other NGOs had failed to renew their old licenses.
Government data indicates that over 20,000 Indian NGOs have been stripped of their foreign funding licenses since 2011.
Organizations that lost their permit in the latest round of penal action include NGOs such as Oxfam India, Tuberculosis Association of India, the Ramakrishna Mission as well as the Missionaries of Charity, which was founded by the late Mother Teresa, and premier educational institutions such as the Delhi University, the and the Indian Institute of Technology-Delhi, among others.
Days after, the government restored 74 licenses, including those of Missionaries of Charity and the Delhi University, but a majority continue to remain blocked.
Within India’s nonprofit sector, the news was received with trepidation and little surprise.
Many within the sector Devex spoke to said the revocations of funding permits are just the latest chapter in the Indian government’s continuing bid to impose a tight leash on its nonprofit sector.
“For a long time, the Indian state, cutting across party lines, has viewed NGOs as being adversarial,” said Aakar Patel, author of “Price of Modi Years” and chair of Amnesty India, which had to shut its operations in September 2020 after the government froze its accounts without notice, days after the organization highlighted alleged human rights violations by police personnel in the Delhi Riots.
“But what we have been seeing for the past few years is a specific sense of antipathy, where the State sees NGOs as its enemy and wants to actively shut it down,” Patel added.
Despite repeated attempts, the Modi government’s Ministry of Home Affairs remained unavailable for comments. In October, the ministry told India’s Supreme Court that receiving foreign funds was not a fundamental right, adding that “genuine NGOs need not shy away from regulatory compliance.”
Regulatory stronghold grows
But evidence demonstrates that the Modi government’s tenure in office, which began in 2014, has coincided with a growing crackdown on the country’s NGOs.
Shortly after it came to power, news reports said the Modi administration was making a “hitlist” of NGOs it believed had suspect sources of funding and were linked to fundamentalists and extremists. In 2016, Modi claimed NGOs were conspiring against him and his government because he was pushing for more accountability in the sector. In November last year, the country’s National Security Advisor Ajit Doval called civil society a “new frontier of war,” which could be “subverted, suborned, divided, manipulated to hurt the interests of a nation.”
All this has had a tangible effect on the way the country’s NGOs are regulated.
Ministry of Home Affairs data show that since 2011, permits of 20,675 NGOs, also known as Foreign Contribution Registration Act 2020, or FCRA, licenses, have been revoked, most of them due to purported “violations” of the act. The website does not mention the violations. Of these, 80% or 16,745 have been canceled since 2014, the year Modi came to power.
In the same period, the regulatory stranglehold around NGOs has also only been growing stronger.
In 2016, the Modi government asked all NGOs, which receive government or foreign funds, to declare the assets owned by their officeholders. Three years later, the Indian government warned NGOs with foreign donors of action if they did not submit and seek approval first before making any changes in the list of officeholders.
In September 2020, amid the pandemic, the Modi government amended FCRA 2010 to ban NGOs from making subgrants of the overseas funds it receives to other NGOs who have the FCRA permit while capping administrative expenses at only 20% of the funds they receive.
It also asked all NGOs to open a new account in one designated New Delhi branch of a state-owned bank to receive this funding. The changes empowered the government to ban organizations from using the foreign funds they have received if the government “after a summary inquiry … pending any further inquiry” believed that the NGO could have flouted FCRA norms.
All these changes have dealt a devastating blow to NGOs, say sector veterans.
“Before the amendments, bigger NGOs would draw in funds from international donors and pass it on to smaller NGOs who lacked fundraising resources,” said Dr. Amita Joseph, a development professional for over two decades and a part of the core team that brings out an annual report on corporate social responsibility funding patterns in India’s nonprofit sector.
“With subgranting banned, there are so many smaller NGOs which are suddenly left without funds and have been forced to shut shop,” Joseph says, adding that lack of good quality data made the exact numbers hard to estimate.
An NGO, among those whose foreign funding permit was recently rejected by the Modi government, confirmed this. “Since the September 2020 amendment, we have had to stop all our partnerships with community-based NGOs. This has disrupted relief work and pushed many smaller NGOs to lay off their employees,” an official at the NGO told Devex, not wishing to be named citing the sensitivity of the issue.
In addition, capping administrative expenses to 20% has also introduced operational difficulties for NGOs, the source said. “For instance, our work in the education sector has suffered directly because hiring more teachers to teach rural communities would increase our administrative costs,” the anonymous NGO official said. “As a way out, we are forced to introduce digital technologies which might not be as effective in those communities.”
A new wave
All these are ominous signs for the country at a time when the country faces a fresh, third wave of rising COVID-19 infections. Last year, during India’s devastating second wave, many NGOs complained that they were unable to help people due to the restrictions imposed by the new law.
The fresh revocations threaten to repeat this.
Oxfam India with its Mission Sanjeevani was one of the many NGOs working to improve the country’s COVID-19 response. According to a readout by the NGO, it had been engaged in constructing six oxygen generating plants and distributing 13,388 critical equipment such as ventilators, oxygen concentrators, and cylinders among other activities.
But the revocation of its FCRA license has its work hanging in an uncertain balance across 16 states, a spokesperson for the NGO said. “It is making it difficult to respond to the needs of communities we serve and aid government efforts during this health crisis. The money obtained through foreign contributions was important in funding these efforts to reach out to the marginalized communities and this work will be severely affected,” the spokesperson added.
According to Mathew Cherian, the chairperson at CARE India, an NGO that works on issues of marginalized women and girls, the amendments are leading to churning among the country’s development sector. Cherian said the regulatory taxation frameworks were “strangulating” the country’s nonprofit sector.
“The bigger NGOs are getting cut off from the ground while some of the smaller NGOs are having to shut shop, while others are forced to look at newer, alternative models of funds,” he said.
Some others are fighting back.
Patel, Amnesty India’s chair, said that the NGO had on Tuesday decided to take the government to court over what the organization had called “constant harassment” by government agencies.
“The government wants to create regulations that make it so difficult for NGOs to survive that they will die and their deaths won’t be seen as detrimental to society,” Patel said.
“This needs to be fought.”
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