6 of 10 NGOs audited violated FCRA provisions: Officials
Six of every 10 NGOs inspected or audited between June 2019 and April 2022 had committed one or more of the 12 compoundable offences under the FCRA, officials said.
Six of every 10 non-governmental organisations (NGOs) inspected or audited by the ministry of home affairs (MHA) between June 2019 and April 2022, had committed one or more of the 12 compoundable offences under the Foreign Contribution Registration Act (FCRA), people familiar with the matter said, asking not to be identified. A compoundable offence is one that can be settled, usually with a fine. The number of NGOs that had committed non-compoundable offences is not known.
The ministry inspected or audited 335 NGOs and associations and found that in 201 instances, there were compoundable offences of the law that entitles these organisations to get foreign contributions.
The action, officials say, is in line with the government’s policy that all organisations receiving foreign funds must ensure better compliance, transparency and accountability as well as adherence to declared and legitimate objectives and keep the authorities informed about the expenses.
“Inspections/audits were of 335 FCRA registered organisations were done between June 2019 and April 2022 to examine aspects such as utilization of foreign funds, submission of annual returns, diversion of funds, details of donors, change in names, address and objectives of NGOs etc.,” said an officer, who didn’t want to be named.
Data accessed by HT reveals that between June 2019 and April last year, MHA granted 570 new FCRA licences, 3,766 renewals, 80 prior permissions and 4,384 foreign hospitality permissions. At the same time, requests in fresh licence (2,821), renewal (738), prior permission (291) and hospitality (241) categories were rejected by it. Also, licences of 1,816 NGOs/associations were cancelled and 52 were suspended during this period. It isn’t known whether any of the 335 inspected or audited are among those that had their licences cancelled or suspended.
To be sure, inspections and audits have been carried out after April 2022 as well, but the data is yet to be compiled.
FCRA licences have been in the news since a 2020 amendment that barred public servants from receiving foreign funding and made Aadhaar mandatory for every office-bearer of the NGOs. The new law also says that organisations receiving foreign funds will not be able to use more than 20% of such funds for administrative purposes. This limit was 50% earlier. Civil society has criticized the changes in the law saying it restricts foreign funded humanitarian work in India.
Abishek Jebaraj, a Supreme Court lawyer who has appeared in several FCRA cases, said: “The FCRA laws are severely hampering foreign social investment in India and the meeting of our sustainable development goals”.
He added: “Fair regulations in national interest are important but the never-ending wait for getting registrations, high compliance costs, the vague and overbroad provisions, restrictions on collaboration with FCRA funds, arbitrary application of criminal provisions etc., are destroying several development organizations, increasing their administrative costs, causing social sector unemployment and preventing much needed aided to the poor in our country.”
In October 2022, the government cancelled the FCRA licences of two Gandhi family run NGOs, Rajiv Gandhi Foundation (RGF) and Rajiv Gandhi Charitable Trust (RGCT) alleging that they violated several provisions of the act such as using funds for personal gains, diverting it for undesirable purposes, not keeping the government in loop about source and utilisation of funds, and not using the designated bank account.
The ministry recently ordered investigation by the Central Bureau of Investigation (CBI) against Oxfam India and environment law advocacy group – LIFE (Legal Initiative for Forest and Environment) citing serious violations in their funding and utilization.
A second officer said: “The inspections/audits help in effective monitoring of receipt and utilization of foreign funds. Such exercises also eliminate the possibility of benami expenditures and reduction in expenses on unproductive matters like increased salary of employees, bungalows and cars for office-bearers of NGOs”.
Organisations which may not be directly linked to a political party but engage in political action such as a bandh, hartal (strike) or rasta roko (road blockade) will be considered to be of political nature, according to new FCRA rules. The organisations covered under this category include farmers’ organisations, student or worker organisations, and caste-based organisations.
Responding to a query on the government using FCRA to crack down on critics and environmental groups, home minister Amit Shah on May 4 said in an interview with HT: “I don’t think more than 10% of the NGOs would have lost their licence. Working in the environment sector does not mean that they will not abide by the law of the land. Money coming into the country from abroad is a sensitive issue and there is a law for that, no one should transgress that. If anyone does that, then surely there will be action”.
MHA informed Parliament in March that organisations working in various fields received around ₹55,449 crore between 2019 and 2022. While ₹16,306.04 crore was received by NGOs in financial year 2019-20, ₹17,058.64 crore was received in FY2020-21 and ₹22,085.10 crore in FY2021-22.
