Home / Opinion / Views /  Foreign funding: Who’s at loss, NGOs or needy poor?

Talk of the multiplier effect. After more than 6,000 privately-run non-profit organizations across India lost their licences for foreign funding, the bigger loss was to Indians in need of their help. The policy liberalization in this field that went alongside our embrace of an economy open to global capital, with a push made to lay colonial-era suspicions of external influence to rest, has never had an easy run. While inflows were welcome in most business sectors, security and other concerns kept such money for non-profit endeavours under close watch, not least to foil any wicked plots hatched abroad against our interests and funded under the cloak of social work. Under the current government, which recently brought ‘self-reliance’ back as a slogan after decades, our rules have been tightened. About half a decade ago, the Centre amended the Foreign Contribution (Regulation) Act, an Emergency-era law that saw a milder version enacted in 2010, to require the renewal of non-profit funding permits every five years. Most FCRA licence losers reportedly failed to apply for it in time, despite reminders, but nearly 180 applications were rejected on account of alleged “violations". In earlier exercises billed as clean-ups, in 2015 and 2017, over 15,000 entities had lost their FCRA registration; duplicate numbers were held as a scandal back then, but some observers hinted at duplicitous aims.

In 2020, those who argued that the Centre was out to clamp non-profits were vindicated when the FCRA was revised to insist that overseas funds flow only into accounts held with State Bank of India’s main branch in Delhi, no sub-contract jobs be farmed out, and that expense sheets be submitted four times a year to show administrative costs no higher than 20% of their foreign intake. The reduction of this cap from 50% earlier threw the finances of several in jeopardy, especially think-tanks and others with payrolls and service bills. In any commercial field, such curbs would’ve been scandalous. But non-profits face stiff norms. Meanwhile, acclaimed do-gooders have had their activities frozen. In 2015, Greenpeace, whose activism against a nuclear power plant was frowned upon by our previous regime, had its FCRA licence revoked. The trend since has not been edifying. Last month, not long after being accused of a role in illicit religious conversions, Mother Teresa’s Missionaries of Charity lost its permit for an alleged failure to meet renewal conditions. Oxfam and Indian Medical Association have reportedly joined the list. Even if legally-valid reasons are cited, it’s hard to deny that non-profits on the whole have been dealt an unfair blow.

While corporate social responsibility funds would be available to do-gooders, what’s not easy to get is why India took a policy stance that could deprive many of the country’s needy of foreign aid. With state support often patchy in remote parts, all endowments that can help us relieve distress should be welcome. It’s all the more pressing in pandemic times, with hardscrabble lives being led. Likewise for worthy purposes like education and research, among others. Fund misuse can be policed without harsh rules, surely. As for self-sufficiency, although we have many non-profits funded locally, including an active network run by our ruling party’s ideological mentor, the market rationale of better outcomes obtained from multiple players with diverse ideas is applicable in this field too. Let’s not cramp good work.

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