A Few FCRA-listed NGOs fail to show the right area of work

As per the data revealed by the Union Home Ministry,  over the past nine years, of the 407 non-governmental organisations (NGOs) that got approval from the Union government to receive foreign funds for religious purposes, failed to showcase their area of work.

• There are several NGOs that have not listed religion as at least one of their purposes, but are perceived to be working in that space.
• The Ministry’s annual report of 2020-21 showed that nearly 50% registration requests were denied that year.
• From April 1 to December 31, 2020, the Ministry granted registration to 127 but declined registration to 607 NGOs. Similarly, from April 1 to December 31, 2022, while 51 NGOs were granted FCRA registration, 153 were declined the registration. 

Why scrutinizing NGOs is important?

• Registration under the Foreign Contribution (Regulation) Act (FCRA), 2010, is mandatory to receive donations from outside India.
• For this, the NGO or association must have a definite cultural, economic, educational, religious, or social programme, and can register under multiple categories.
• There is a need to take a call for funds and their sources in these organizations are to manage the illegal source of foreign money to prevent money laundering.
• While the Act aims at regulating both the “acceptance and utilisation of foreign contribution or foreign hospitality”, it can also prohibit organisations from taking in these funds for “any activities detrimental to the national interest”.

Foreign Contribution (Regulation) Act (FCRA), 2010:

• The “Foreign Contribution (Regulation) Act” (FCRA) regulates foreign donations and ensures that such contributions do not adversely affect internal security.
• First enacted in 1976, it was amended in 2010 in which a slew of new measures were adopted to regulate foreign donations.
• After the coming of FCRA, in 2010, the FCRA, in 1976 has been repealed.
• The FCRA act is implemented by the Ministry of Home Affairs. It is a mandatory requirement to receive foreign funds.
• Under the new rules notified by MHA in 2015, NGOs are required 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.

Provisions of the Act:

• The FCRA requires every person or NGO wishing to receive foreign donations to be registered under the Act.
• To open a bank account for the receipt of foreign funds in the State Bank of India, Delhi is mandatory.
• These funds can be utilized only for the purpose for which they have been received, and as stipulated in the Act.
• The receivers of foreign funds are also required to file annual returns, and they must not transfer the funds to another NGO.

Applicability: The FCRA is applicable to all associations, groups, and NGOs which intend to receive foreign donations. It is mandatory for all such NGOs to register themselves under the FCRA.

Registration under FCRA:

• FCRA registrations are granted to individuals or associations that have definite cultural, economic, educational, religious, and social programmes.
• MHA makes inquiries through the Intelligence Bureau into the antecedents of the applicant and accordingly processes the application.
• The MHA is required to approve or reject the application within 90 days, failing which it is expected to inform the NGO of the reasons for the same.
• Once granted, FCRA registration is valid for five years.
• NGOs are expected to apply for renewal within six months of the date of expiry of registration. In case of failure to apply for renewal, the registration is deemed to have expired.

When is a registration suspended or canceled?

• The government reserves the right to cancel the FCRA registration of any NGO if it finds it to be in violation of the Act.
• Registration can be canceled for a range of reasons including, if “in the opinion of the Central Government, it is necessary for the public interest to cancel the certificate”.
• Once the registration of an NGO is canceled, it is not eligible for re-registration for three years.

Concerns:

• Hindering Right to Speech: The FCRA restrictions have serious consequences on both the rights to free speech and freedom of association under Articles 19(1)(a) and 19(1)(c) of the Constitution.
  • The Right to free speech is affected in two ways:
• Create political Biasness: By allowing only some political groups to receive foreign donations and disallowing some others, can induce biases in favour of the government.
  • NGOs need to tread carefully when they criticise the regime, knowing that too much criticism could cost their survival.
• Besides, given that the right to freedom of association is part of the Universal Declaration of Human Rights (Article 20), a violation of this right also constitutes a human rights violation.
• In April 2016, the UN Special Rapporteur on the Rights to Freedom of Peaceful Assembly and of Association undertook a legal analysis of the FCRA, 2010.
• It stated that restrictions in the name of “public interest” and “economic interest” as invoked under the FCRA failed the test of “legitimate restrictions”.
• The terms were too vague and gave the state excessive discretionary powers to apply the provision in an arbitrary manner.
• In this context, though it is necessary to regulate corrupt NGOs, there needs to be clarity on terms like public interest.