Ford Foundation allowed to operate under FEMA, to be monitored by finance ministry

NEW DELHI: The government-Ford Foundation dispute, which had taken many headline-grabbing turns, is over. Ford Foundation has been allowed an exception in its operating environment and the US-headquartered NGO has in turn climbed down from its earlier demand of maintaining the status quo whereby it worked in a legal limbo, with no specific regulation applying to it.

Ford Foundation has been allowed by government to operate in India under Foreign Exchange Management Act ( Fema), and therefore the ministerial watchdog will be finance ministry. Other NGOs operate under the ambit of the Foreign Contribution Registration Act (FCRA) and the ministerial watchdog is the home ministry. Ford Foundation will only need to inform home ministry in case it receives foreign donations.

A Ford Spokesperson said, "The Ford Foundation was honored to learn in December that its registration to operate in India under FEMA was approved by the Government of India. We are grateful to the many partners in government who played a role in this process, and we look forward to the ongoing process of engagement that will shape our work going forward."

This rapprochement comes after a long bout of controversy that included a CBI inquiry against activist Teesta Setalvad, who had received funds from the Foundation that the home ministry had said were not rules-compliant. Government officials who spoke to ET on this matter did not wish to be identified. ET’s email to the Ford Foundation went unanswered.

Allowing the Foundation to operate under FEMA, as opposed to FCRA, means the home ministry will find it tough to take action against the NGO in case it perceives any “violation”, a senior ministry official said. Another official said, “Earlier, the office of Ford Foundation was not recognised under any law but now they have been given a legal sanctity.”