New FCRA Rules for NGOs: They are Throttling, Say Activists, Question Govt Motives

The new FCRA rules notified by the Ministry of Home Affairs on November 10 have drawn sharp criticism from social activists

It’s a ‘culmination’ of what started in 2010 by the Congress-led UPA government. Those not in the good books of the government were denied renewal. The present BJP-led NDA government is following the Congress’s path. It has tightened the rules further

Shaheen Nazar | Clarion India

NEW DELHI – The new FCRA rules notified by the Ministry of Home Affairs on November 10 have drawn sharp criticism from social activists who view it as an attempt by the government to “throttle” the non-government organisations (NGOs), especially those working in critical fields.

“This is throttling… a determined attempt by the government to ensure that the voices of NGOs are curbed,” said Henri Tiphange, head of a pan-India NGO called Centre for Promotion of Social Concern (CPSC).

What is the FCRA?

Foreign Contribution Regulation Act (FCRA) is a law that is meant to regulate foreign funding of certain individuals and organisations. The law, first enacted during the Emergency in 1976, ostensibly meant to address ‘security concerns’ related to foreign funding in politics. It was amended in 2010 and it explicitly excluded business and financial transactions from its purview, limiting its application only to NGOs and charitable organisations. It also included vague terms that can be very widely interpreted to include a host of organisations in its list of offenders.

For instance, Section 3 of the 2010 Act lists individuals and organisations prohibited from receiving foreign funds. Apart from individuals already prohibited under the 1976 law–which included political parties, candidates for election, legislators, journalists, publishing houses and government servants–the 2010 amendment also adds electronic media companies and “organisations of a political nature” to the list.

The meaning of that phrase was left intentionally vague, and over the years human rights groups and activists have alleged that its broad definition has been repeatedly abused to target groups that are critical of the government or its policies.

Supreme Court intervention 

The Indian Social Action Forum (INSAF), a national forum of over 700 movements and NGOs in India, challenged this vague description of the phrase “political nature” in the Delhi High Court and went up to the Supreme Court. In March 2020, the apex court passed an order limiting the scope of the word “political” in the FCRA law to mean only ‘party politics’ or ‘active politics’. The FCRA Rules 2020 notified last week have changed the rules to comply with the apex court order. However, this is not the only change in the new rules.

New rules

The Centre for Advancement of Philanthropy (CAP), a Mumbai-based group that offers compliance advisory to NGOs, too, has expressed disappointment over the new rules. “After the radical changes under the Foreign Contribution Regulation (Amendment) Act 2020 (which has come into force from 29 September, 2020), the hopes and aspirations of over 20,000 associations registered under FCRA 2020 were riding on these rules for some relief and more clarity. Alas, these rules neither offer relaxation nor further clarity. In fact, the new Resume ules have further tightened the existing bolts,” reads a comment on the website of CAP.

Other changes in the rules have been made to put into operation the FCRA Amendment Act, 2020. For instance, after the amendment, foreign funds can only be received in SBI’s New Delhi Main Branch. This makes it easier for the government to monitor the transaction of over 20,000 organisations registered under FCRA. Under the new rules, all such organisations will now have to open an account in the SBI New Delhi Main Branch before 31 March, 2021.

The amendment had also capped administrative costs at 20% (reducing it from 50%). The new rules have failed to clarify the precise definition of what comes under ‘administrative cost’. This has become a serious point of concern for many organisations, especially those whose work is not limited to distributing charity.

CPSC’s Tiphange says the new rules have scope only for those interested in works like building schools or bathrooms through donations provided by Corporate Social Responsibility funds.

“But if you want to do some critical work like legal aid, assisting the poor, taking up the case of misuse of land, displacement of a population, migrant labour or domestic violence, and want to take your job seriously, then it’s going to be a very, very serious issue… The government does not want us to do it,” he said.

Tiphange, who is a victim of previous government measures and currently in litigation with the government, finds the new rules a “culmination” of what started in 2010 by the Congress-led United Progressive alliance (UPA) government. “P. Chidambaram, as Home Minister, brought the amendments to FCRA to curb the activities of NGOs. He introduced the provision of renewal of the FCRA licence every five years. This gave the government power to control the activities of NGOs. Those not in the good books of the government were denied renewal. The present BJP-led National Democratic Alliance (NDA) government is following Congress’s path. It has tightened the rules further,” he told Clarion India.

The amended rules also extend the level of control of MHA over governing bodies of FCRA institutions. Earlier, organisations were obliged to intimate the MHA only if 50% or more of the governing body was being changed. Now, even if a single new member is being added to the governing body, the MHA will have to be informed and the addition of the new member will only be effective after MHA approval.

Tiphange is of the opinion that institutions like the National Commission for Women, the National Commission for Children, te National Commission for Human Rights, etc. are mere puppets of the government. “These statutory bodies are not doing their job properly.”

Only those who want to do propaganda work for the government are going to survive. Anyone who is critical of the government is not going to be tolerated, he charged.

The bank account of Tiphange’s organisation CPSC was closed following the 2010 amendment. He challenged this in the Delhi High Court. In the court, the Home Ministry categorically said that “he was found to be providing material and information to UN Rapporteurs and US Embassy and British High Commission officials portraying India’s human rights record in a negative light, on the basis of that funding.

Further, Tiphange was using foreign contributions to the detriment of India’s image. By using foreign money, he marked himself and his organisation CPSC as defender of human rights in India and helped the foreign forces to project the image of India in poor light.”

Still, Tiphange won the case in 2014, after which the account was restored while the UPA government was still in power. But two years later, the NDA government did not renew his FCRA licence. No satisfactory reason was given.

“Just a two-liner that said based on field study your FCRA licence is not renewed. Till date, we have not been told who did the field study, what does it exactly say, how it was conducted.”

Once again he went to court. The government gave the affidavit to the court in a sealed cover. Four years later, the case is still pending. “We had 300 staff at that time. We were running a programme of giving human rights education in several schools across the country. All has come to an end. Tamil Nadu where the state government has adopted our programme is the only exception. There, it is still running in 11,000 schools.

Asked if he or someone else was considering to challenge the new ruling in court, Tiphange said he had raised the issue with VANI or Voluntary Action Network India (VANI), the apex body of Indian NGOs which represents 500 organisations with an outreach up to 10,000 all over India.


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