As Three More NGOs Lose FCRA Licence, a Relook at the Govt’s Funding Restrictions

The Young Women's Christian Association of Delhi and two others having lost their FCRA licences, during the latest round of government scrutiny, adds to the alarming trend of licence cancellation within the voluntary sector in India.

 New Delhi: Concerns that the Union government is using the Foreign Contribution (Regulation) Act (FCRA) to curb the activities of non-governmental organisations (NGOs) have been raised once again, after three more licenses were cancelled recently.

Through a series of amendments to the FCRA, successive governments have imposed restrictions on the activities of several NGOs, leading them to face several challenges including a loss of jobs.

More recently, there has been a concerning rise in the list of NGOs whose FCRA licences have been cancelled or have not been renewed by the government.

Political analysts and civil rights group say this is part of the Bharatiya Janata Party government’s move to suppress organisations that are critical of it or are unfriendly.

Three NGOs, including the Young Women’s Christian Association (YWCA) of Delhi, have lost their FCRA licences in May and June, during the latest round of scrutiny by the Union home ministry, National Herald reported on June 29.

Two more NGOs – CNI Shishu Sangopan Griha and Program for Social Action (PSA) – have lost their licences, too, the news outlet reported.

These NGOs work with children, women, and survivors of gender-based violence. YWCA, for instance, runs shelter homes for women and helps in community development. It’s licence was renewed for five years till 2028.

The email sent to YWCA, seen by National Herald, said they have been denied the FCRA licence under Section 16(1) read with Section 12(4)(b).

According to Section 16(1) of the FCRA, “every person who has been granted a certificate under section 12 shall have such certificate renewed within six months before the expiry of the period of the certificate.”

Section 12(4)(b) of the Act says “the person making an application for registration…[has] undertaken reasonable activity in its chosen field for the benefit of the society for which the foreign contribution is proposed to be utilised.”

Based on these provisions, it can be inferred that either the NGO failed to apply in time for the renewal of the certificate or was unable to show adequate work in their specific field.

However, the organisations told National Herald that they submitted the required papers within the deadline.

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

What the NGOs said on the cancellation of FCRA licences

“We are disappointed to hear the news. We work in partnership with the government for several of our programmes. Our work for women will not stop. We are looking through the papers and we will then appeal to the government. We hope with our credibility, we should be able to get the FCRA licence renewed,” Pragya Mohan, YWC-Delhi general secretary, told the news outlet.

“The FCRA renewal application of PSA stands denied as per the home ministry website and a one-line email [was] received by the organisation. In plain reading, one of the two reasons cited is also technically wrong since PSA had filed our renewal application very much on time. PSA is one of the oldest network organisations successfully functioning since even before FCRA came in,” PSA general secretary Aashima Subberwal told the news outlet.

“We will take it for review, with a hope of a course correction,” she added.

“Many people will lose their livelihood especially when jobs are not available. PSA played a pivotal role in COVID-19 relief and was instrumental in supporting government hospitals across India,” said PSA president Xavier Dias.

In 2016, civil society organisations had called the FCRA a “tool of repression” by the government, after FCRA licences of about 20,000 NGOs were cancelled for allegedly violating various provisions of the Act.

The organisations had called the “FCRA registration refusals” as “the most immediate example” of an escalating problem whereby the “government maligns and criminalises those very organisations and individuals that stand for human rights and liberal values.”

“Those who have worked for the most marginalised and disempowered sections of society, while holding the government to account are being persecuted by the state,” they had said.

How many FCRA licences have been cancelled so far?

There are three key requirements for an NGO which intends to receive foreign donation: 1) register itself under the Act; 2) open a bank account with the State Bank of India, New Delhi, to receive foreign funds; and 3) utilise those funds only for the purpose of which they were being received.

Cancellation of the FCRA licence means the organisation will not be able to receive any funds from abroad.

According to the home ministry’s dashboard, as on July 3, 2023, at least 20,693 NGOs have their licences cancelled, while 16,257 NGOs are active.

According to NewsClick, several organisations that no longer hold an FCRA registration are: Hamdard Education Society, Indian Institute of Technology (Hauz Khas), Indira Gandhi National Centre for Arts (IGNCA), Indian Institute of Public Administration (IIPA), National Foundation for Communal Harmony (NFCH), Delhi College of Engineering, Goa Football Association, Press Institute of India, The Lepra India Trust and Indian Institute of Management (Calcutta), Medical Council of India, Emmanuel Hospital Association, which runs over a dozen hospitals across India, Tuberculosis Association of India.

The others in the list are Vishwa Dharamayatan, Maharishi Ayurveda Pratishthan, National Federation of Fishermen’s Cooperatives Ltd, Bhartiya Sanskriti Parishad, DAV College Trust and Management Society, Godrej Memorial Trust, etc.

Sirajuddin Qureshi, chairman of the All India Islamic Cultural Centre, had told the Economic Times in January 2022 that it faced a rejection of FCRA over a “procedural lapse” for the “first time in 40 years”.

In March this year, the Union government cancelled the licence of the Centre for Policy Research (CPR) for 180 days.

In 2021, Oxfam’s FCRA licence was revoked. In 2020, Amnesty’s bank accounts were frozen, saying that it allegedly received foreign funds illegally, a charge the organisation has denied. It had to pause its work in India because it could not access the funds.

In 2015, Greenpeace India’s foreign funding was suspended on allegations that it had “prejudicially affected the economic interest of the state”.

Also read: Leading NGOs Believe FCRA Changes Will ‘Kill’ Voluntary Sector

The role of NGOs and government’s restrictions on funding

The role of NGOs is to focus on social issues such as protecting the interests of the marginalised communities, human rights, etc. Some NGOs work at the grassroots level, while others have a national and international reach. NGOs bridge gaps in society that the government and others cannot fill.

From spreading awareness on religious polarisation and sex education to providing healthcare and other social services, the value NGOs bring to a country goes beyond monetary measurements.

However, there appears to be no data on their direct economic contribution to the gross domestic product (GDP) in India.

On the contrary, in 2014, an Intelligence Bureau (IB) report had said that several foreign-funded NGOs are “negatively impacting economic development”.

The negative impact on GDP growth was estimated to be around 2-3% annually.

These NGOs, according to the IB report, were receiving donations from the US, the UK, Germany, The Netherlands and Scandinavian countries.

The report highlighted that caste discrimination, human rights and big dams were earlier chosen by international organisations to “discredit India” at global forums. And, the choice of issues has shifted to “growth-retarding campaigns” focused on extractive industries, genetically-modified organisms and foods, climate change and anti-nuclear issues.

First introduced in 1976, during the Emergency, the FCRA regulates the acceptance and utilisation of foreign funds to NGOs in India. It further “prohibits [such] acceptance and utilisation…for any activities detrimental to the national interest…”

FCRA has been amended multiple times since its inception. An amended FCRA was enacted in 2010. It was again amended in 2020, giving the Narendra Modi-led government a tighter control over how these NGOs receive and utlise their funds.

Interestingly, FCRA cancellation is not a new thing in India. Over 4,000 NGOs had lost their FCRA licences under the Manmohan Singh-led government.

In April 2015, the home ministry had cancelled the FCRA licences of nearly 9,000 NGOs because of their failure to submit audited financial reports for several years.

According to Newslaundry, out of over 10,000 organisations that were issued notices to submit their audited reports for the years 2009-10, 2010-11 and 2011-12, only 229 organisations responded, leading to the cancellation of the licences of the remaining NGOs. The organisations are supposed to submit their financial reports within nine months of the closure of the financial year.

In 2012, the licences of the NGOs were cancelled, as earlier mentioned, due to similar violations.