Scrap FCRA, NGOs doing Church work with foreign funds: Experts

New Delhi: * In the last decade, more than Rs 85,000 crore has come in for the NGO sector from global patrons.

* Of the 40,000-odd NGOs registered under Foreign Contributions Regulation Act (FCRA), at least half do not file proper accounts with the Ministry of Home Affairs (MHA).

* As per a report published by the Home ministry for the year 2011-12, there were 41,844 registered associations under the FCRA and some 22,702 NGOs reportedly received Rs 11,546 crore as foreign contributions.

* As compared to 2004-05, the amount received in 2011-12 was up by 85 percent (from Rs 6,257 crore to Rs 11,548 crore) and their number 38 percent (from 30,321 to 41844).

* A total of Rs 1,16,073 crore was received by the NGOs between 1993-94 to 2011-12. Only about 55% NGOs gave audited account.

* Among the list of donors, the United States tops the list (Rs 3838.23 crore) followed by the United Kingdom (Rs 1219.02 crore) and Germany (Rs 1096.01 crore).

* A majority of donors, including the top three, are church-based organisations such as Compassion International USA (Rs 183.83 crore) followed by Church of Jesus Christ of Latter Day Saints, USA (Rs 130.77 crore) and the Kindernothilfe e.V. (KNH) Germany (Rs 51.76 crore).

* Of the top 15 donor agencies, 13 are related to some or the other Christian sect. Over 90 percent of the top 30 recipient organizations are engaged in missionary activity.

* The highest amount of foreign contribution was received by the following Christian organization namely World Vision India, Chennai (Rs 233.38 crore), followed by the Believers Church India Pathanamthitta, Kerala (Rs 190.05 crore) and Rural Development Trust, Ananthpur, Andhra Pradesh, (Rs 144.39 crore).

* To put this in perspective, India’s total defence allocation (2011-12) was Rs 1,64,000 crore. Thus, foreign-funded NGOs (FFNGOs) in 2011-12 received seven percent of India’s then defence budget.

The statistics and facts are startling, for sure. But are they reason enough to scrap the FCRA? Yes, felt most of the participants in the conference Towards a Rational Government Policy for NGOs organized by Indic Studies Network, CSDS, at India International Centre in the national capital on Saturday.

With the enactment of compulsory spends on corporate social responsibility (CSR) under the new Companies Act, the time has come to scrap FCRA and ask the NGOs to seek local funds, argued Professor Vaidyanathan of IIM Bangalore.

“We have 535 NGOs for 535 Indians. It means, we are the largest NGOed country in the world,” said Vaidyanathan, adding, “A significant portion of the received funds are used for ‘Establishment Expenses’, which is against the basic cannon of charity work. It is expected that charity involves lesser fixed assets creation, particularly of the flamboyant nature. Also, the jet-setting aspect of the NGOs provides clues to the nature of expenditure. Whether it is New York or Geneva we find members of Indian NGO community lobbying for some cause mostly of human rights. This creates a closed loop wherein they receive money to further some agenda and for that they receive more money,” says the academician.

He further says large amount of funds go to Christian organisations whose purpose is conversion. This act of “soul harvesting” or “planting of the Church” is an “anachronistic practice” of 19th century, which is totally “incongruous in the 21st century where “faith based political movements like the Church movements are disappearing from Europe their cradle of growth”.

Seeking a ban on foreign funding, he concluded by saying, “Giving has always been our ethos and we should continue with it. Why the sufferings of a tribal man in Jharkhand be the concern of people in Denmark? At a time when ‘Make in India’ is talked about everywhere, our social service should also be made indigenous.”

Advocating scrapping FCRA, PRS Legislative Research Co-Founder and President MR Madhavan said the legislation encourages “monopoly” which ultimately leads to “corruption”. “The act always catches good people and therefore, it is high time to scrap to it. We are open to government funding if it doesn’t affect our independence in research and if there are no strings attached,” he said.

“What is the purpose of this law? The Unlawful Activities (Prevention) Act 1967 and the Prevention of Money Laundering Act 2002 address issues such as terrorist financing. Governance and transparency requirements are addressed through laws governing societies, trusts, companies, etc. Reporting of income can be ensured through the Income Tax Act. The prohibition of receiving foreign contribution by various groups such as legislators, bureaucrats, etc, could be enforced through service rules and codes of conduct rules. And if there are loopholes in any of these laws, they can be plugged by amending the respective rules. And we could just use one clause from the proposed law: Clause 54(1) that reads, ‘The Foreign Contribution (Regulation) Act, 1976 is hereby repealed’.”

Under the current law, organisations (including societies and associations) require prior permission before being eligible to accept any contribution from a foreign source. They need to obtain a FCRA certificate from the Home Ministry, and their accounts are open to inspection. The returns of the FCRA accounts need to be reported to income tax authorities annually. The certificate has perpetual validity unless it is withdrawn by the government. Under the proposed law, the certificate will be valid for only five years, and would have to be renewed six months prior to expiry.

The Bill prohibits acceptance of ‘foreign hospitality’ by a legislator, office-bearer of a political party, judge, government servant or an employee of a PSU without prior permission. The Act lists eight categories that are prohibited from receiving any foreign contribution. In addition to legislators, judges and bureaucrats, this list includes correspondents, columnists, cartoonists, editors, printers and publishers of newspapers. It also includes any association or company engaged in production or broadcast of audio news or audio visual news or current affairs programmes through any electronic mode (thus covering radio, TV and the internet).

The Bill sets a cap of 50 percent of any foreign contribution to be used for administrative expenses. The definition of what constitutes “administrative expenses” is left to be prescribed by the central government.

Academic-activist Madhu Kishwar also proposed a ban on foreign funded NGOs in her six-point charter. “The government needs to set up a high-powered time bound commission of inquiry into the functioning and sources of funding of all NGOs in India, with the objectives of unravelling the workings of FFNGOs and to find out: (a) If they have been violating the provisions of FCRA, which forbids political activity for those receiving foreign funds; the nature of the donor agencies they are getting aid from; the stated and the hidden agendas of those agencies; their linkages with secessionist and other antinational outfits, if any; if they are recipients of hawala transactions for political activities including lobbying and campaigning. Those found guilty should be punished appropriately.

“While this commission of inquiry carries on with its investigations, we urge the government to enact a law that bans the use of foreign money for carrying out political or religious activity in the country,” she says.

“Set up a National Social Service Fund under the charge of an autonomous body like the Election Commission in every state capital. Into this pool should also go all the money that is currently being given by the government to various NGOs for development work or for implementing government schemes.

“The FCRA bans political activity by foreign funded NGOs. The government needs to define political activity more clearly,” she said.