The Government introduced the Foreign Contribution (Regulation) Amendment Bill, 2020 in the monsoon session. As mentioned in the speech in the Parliament on September 21, 2020, the intention to strengthen national security and encourage good governance of NGOs is appreciable, but should not become the pretext for silencing dissent and critics of the BJP government.
There may exist a few NGOs indulging in dubious practices, but in trying to prevent these selected few, the Union Home Minister Shri Amit Shah seeks to tarnish all the NGOs who are doing a yeoman service during Covid-19, floods and rising unemployment.
The most harmful element of the bill is the amendment of Section 8(1), which reduces the limit of foreign contribution to be used for administrative expenses from the existing 50% to an arbitrary 20%. This step is completely arbitrary, and it’s noteworthy that the Central Government would never put limits on the administrative expenses of private companies or on the salaries of big CEOs. As also illustrated in the post on the Companies (Amendment) Bill, the Central Government has a striking proclivity to help the big corporates at the cost of farmers, labourers and now NGOs and such organisations.
There are two primary problems with this reduction. Firstly, it is a figure declared without any supporting data or reasoning. Additionally, a procedural decision which concerns the donor’s money should be left to the donor’s discretion. By providing a limit, the Government has not only taken away space for decision from the donor-donee relationship but also attempted to micro manage these organisations.
Secondly, the definition of ‘administrative expenses’ under Rule 5 of FCRR, 2011 includes rent, salaries of the management, volunteers, travel expenses, legal fees, among other expenses, which means that a majority of an association’s functions fall under the definition. This expansive definition and reduction of allowance poses a two-fold challenge. NGOs and organisations are fundamentally involved in vocational training and capacity-building exercises, training expenses are also under the ambit of ‘administrative expenses’, thus restricting the funds that can be utilised for this purpose. Numerous NGOs have also expressed concerns of closure and loss of talented staff as salaries and charges for professional staff also fall under the same definition.
Additionally, despite the Supreme Court judgement, K.S. Puttaswamy v. Union of India and vehement protest in the Parliament, the new Section 12A mandates the provision of Aadhar for registration and renewal of registration. The same section provides for passport and the OCI card for foreigners. While mandating Aadhar, it differentiates between two Government issued documents of identity; passport and Aadhar—thereby, bringing into question the validity and veracity of the passport.
The other provision which will prove to be a nightmare is the mandatory requirement to have FCRA bank accounts in a Government notified SBI branch in New Delhi. This will be a logistical ordeal for NGOs and organisations working in distant parts of the country with existing functional FCRA bank accounts in accordance with the unamended Section 17. This amendment comes with a lack of explanation or reason, posing a question on capabilities of other banks. Furthermore, former Section 13 of the act has been amended to provide for an extra 180 days of suspension of certificate over and above the existing 180 days, making it a total of 360 days.
In addition to the glaring fault lines, the amendment also arms the Government to curb opposition, both political and otherwise. As is evident from the trending headlines, opposition of any kind is being smothered. This comes in the backdrop of a chargesheet being filed against Senior Leader of Congress and designated Senior Advocate, Mr. Salman Khurshid for charges relating to the CAA protests earlier in February. The amended Section 11 creates space for Central Government to target organisations arbitrarily and also freeze their accounts without a final decision.
NGOs and welfare organisations play a pivotal part in effectuating the trickle-down phenomenon, aiding development at the grass-roots. Especially— in the time of this raging pandemic, these organisations have become even more relevant and necessary. By virtue of this amendment not only will the smaller NGOs be forced to shut down but the ones that stay afloat will have to immensely compromise on their operations. In an attempt to weed out the few, clipping wings of a system that works to fill gaps that policies may leave —is not only short-sighted but also immensely dangerous. The Government should work with donor agencies to keep a check on suspected NGOs, instead of stifling the operations of NGOs indiscriminately.
In light of the principles of deliberative democracy and the glaring issues affecting NGOs and other organisations, the Bill necessitates a Standing Committee consideration. It will not only respect the conventional legislative process, which has been outrightly disregarded, but also, provide the space for dialogue and constructive deliberation between the stakeholders and the Government.