MHA Refuses to Reveal Why FCRA Was Amended, Even as Changes Impair NGOs’ COVID Aid Efforts

Disclosure of this information will not serve any interest, the MHA says. But if there is no public interest in disclosure, why was the FCRA and its rules amended in the first place, asks RTI activist Venkatesh Nayak.

New Delhi: Even as non-government organisations (NGOs) face severe fund shortages due to changes in the Foreign Contribution Regulation Act (FCRA) effected by the Centre last year – which has adversely impacted their ability to reach out to the poor and marginalised in both rural and urban areas during the second wave of the coronavirus in India – the Centre has repeatedly thwarted attempts by Right to Information (RTI) activists to access details surrounding the reasons why the Act was amended.

NGOs had said FCRA amendments will impact reach, functioning

The Wire had last year reported that leading NGOs believed that changes to the FCRA would deal a crushing blow to the voluntary sector and impact its ability to collaborate and conduct research.

They argued that the changes effected through the Foreign Contribution (Regulation) Amendment Bill, 2020 would severely impact collaborative research in critical fields in India as organisations receiving foreign funds will no longer be able to transfer them to smaller NGOs working at the grassroots level.

They also said the Bill would initially impact the livelihoods of workers associated with these small NGOs and ultimately lead to the “killing” of the entire sector as caps on administrative expenses would make it impossible for even the bigger NGOs to perform.

Modi administration ‘erected hurdles’ for Covid relief

That fear is now materialising. Recently, the  New York Times reported that the FCRA amendment had a damaging effect on the ability of foreign funded NGOs to channel Covid relief and aid from abroad. The article said, “international donors are raising millions, but the Modi administration has erected hurdles for overseas organizations and guided money toward officially endorsed groups.”

Also read: FCRA Law ‘Repressive’, ‘Stifles NGOs’: International Commission of Jurists

Meanwhile, the Narendra Modi government has also been reluctant to release information as to why the amendment was needed.

In response to two RTI interventions made by transparency advocate Venkatesh Nayak last year, in which he asked the Ministry of Home Affairs to disclose the cabinet notes and file notings relating to the amendments to the FCRA Act and the new set of Rules notified subsequently, both the central public information officer and the first appellate authority rejected the plea on grounds of national security.

The MHA sought exemption from providing the information requested by citing Section 8(1)(a) and 8(1)(e) of the RTI Act and said the information held by the ministry has a “fiduciary relationship with multiple stakeholders and disclosure of the same is not likely to serve larger public interest”.

Illustration: The Wire

File notings denied citing ‘national interest’

To the request for being granted access to the file noting and correspondence held by the Ministry in paper and electronic form, the MHA cited “national interest” as the reason for refusing the information. It said: “As the Act’s regulations intend to safeguard national interest (security strategy or economic etc) of the state, the requested information may impinge upon the elements of Section 8(1)(a) of RTI Act. Hence it may not be disclosed.”

Reacting to this, Nayak said “the CPIO rejected the RTI with identically worded orders citing national security under Section 8(1)(a) and fiduciary relationship under Section 8(1)(e). This itself is problematic as I had pointed out in my first appeal.”

Since the information was denied, Nayak submitted his first appeals on the two RTIs in February and the decision on these appeals came in April. It upheld the earlier decision saying, “It is found that disclosure of the information in this matter will not serve any interest. It may undermine the relations of state with foreign states and also hit strategic and economic interests of the state.”

Also read: UN Rights Chief Expresses Concern on FCRA Law, India Says Expects ‘More Informed View’

FAA refused to give information, saying it will ‘not serve any interest’

As the information was denied, Nayak submitted first appeals on the two RTIs in February and the decision came last month upholding the earlier decision. In its decision, the MHA official said: “It is found that disclosure of the information in this matter will not serve any interest. It may undermine the relations of state with foreign states and also hit strategic and economic interests of the state.”

On the response of the FAA, Nayak said, “despite there being two RTIs and consequently two first appeals against each rejection order, the FAA chose to issue a common order on the first appeals. That order came in only last month although the RTIs were filed, end of October and early November 2020.”

Nayak said, “the FAA went a step ahead to add a portion of Section 8(1)(j) which simply does not apply to any of the RTI queries. However, he wanted to seek the protection of one segment of Section 8(1)(j) which relates to absence of public interest as a ground for denial of personal information of an individual. This is nothing but a twisted application of that segment.”

Why was FCRA amended if there was no `public interest’?

He also questioned the rationale behind the MHA refusing to give the information. “If there is no public interest in disclosure, then why was the FCR Act amended and the new Rules notified? Those actions are guided by what the government thinks is in the public interest, namely, the need for imposing a stricter and tougher regulatory regime that will make it more and more difficult for most NGOs to receive foreign funds. So clearly, the CPIO and the FAA’s thinking are in direct contradiction with the thinking of the higher-ups in the government who brought in the amendments,” he said.

Stating that he would soon be filing a second appeal in the matter with the Central Information Commission, Nayak also told the Deccan Herald that cutting off funds to the NGOs and now asking those very NGOs to help fight the pandemic was quite audacious.

Also read: The Government Has Conducted a Surgical Strike on India’s Voluntary Sector

“The NITI Ayog is also holding online meetings with around 1,000 NGOs to help fight the pandemic on the one hand while severely impeding their ability to attract funds from abroad to deliver in areas where the government’s reach is minimal if non-existent. It is also quite audacious for them to ask NGOs what they have done to fight the pandemic and mitigate the suffering of people like they did last year while trying to cut the flow of funds to such organisations,” he said.

Amendments restrained NGOs, empowered authorities

Meanwhile, some NGOs have approached the Delhi and Guwahati High Courts against the amendments. These key elements of these amendments were that they prohibited transfer of foreign contributions by stating that foreign funders can no longer continue the common practice of providing one large grant to an Indian charity with the expectation that it will re-grant the funds to smaller, local charities.

The amendments also provided that any organization seeking registration under FCRA (either prior permission or renewal) must provide identification information for key functionaries. It also lowered the limit on use of foreign contributions for administrative expenses from 50% earlier to 20%.

Another change was that the amendments made it mandatory for recipients of foreign funds to deposit them in a designated FCRA account maintained with the State Bank of India. Also, the new law required that all charities who intend to receive foreign funds will need to open a new FCRA account with a specified bank branch.

The law had also given greater powers to the authorities to take actions related to non-compliance by empowering them to “freeze” the organisation’s remaining foreign funds pending completion of an investigation or by suspending the organisation’s registration for up to one year.