View: The FCRA 2020 amendment deepens a licence raj that could throttle civil society

By Amitabh Behar

The passing of Foreign Contribution (Regulation) Amendment Bill, 2020, in both Houses of Parliament, without any real deliberations, poses deeply troubling and ominous messages for civil society and democracy in India. The amendment reflects a deeply flawed understanding of democracy – in which it has been reduced to electoral democracy or quest for state power, and any other form of democratic action is seen with suspicion and as illegitimate.

The timing of the FCRA Bill was most bewildering as it was tabled in the midst of an unprecedented pandemic, in which civil society has played a stellar role in reaching out and supporting millions of poor Indians by providing food, clothing, shelter, transportation and other basic necessities. This praise has come from the highest quarters, including Prime Minister Narendra Modi as well as Niti Aayog.


In this context it is imperative for us to seek an answer to the question, why was this Bill introduced?

The primary reason given by the minister of state responding to questions of opposition MPs was that the Bill sought to bring greater accountability to the sector. However, he did not give any evidence to demonstrate lack of accountability of the FCRA money. In reality, it is already an over regulated sector.

Before the amendment, the FCRA organisation needed a FCRA number or prior permission to receive money from a foreign source; the money can come to a designated account, which is already in the records of the FCRA division; every new grant, its source, objectives of the project and expenditure needed to be reported on the website of the host organisation and also updated quarterly on the MHA website; and even small changes like change of address or change of trustees/ directors needed to be informed to the FCRA division within 15 days. All these requirements were in addition to the strict compliance needed by other laws of the land like income tax laws, provident fund, gratuity act etc.

Another reason was the perceived narrative of foreign funded NGOs and civil society groups being involved in proselytisation and ‘misusing’ the funds for development by investing them for religious conversions. Again, no data was shared to substantiate this point. Also, this perception is far from truth as most foreign funding neither has church origin, nor do an overwhelming majority of the receiving entities have anything to do with religion as their work is completely dedicated to people’s issues like education, health and livelihood.

The Bill proposed four major changes. First, it restricted any FCRA organisation which receives the money from onwards distribution to even other FCRA organisations. This would be a body blow to the sector, which has worked with the principle of collaboration in which larger entities raise the FCRA money as they have the capacities needed for raising money by negotiating with donors (professional expertise), and then share this FC money with frontline smaller organisations which work directly with the communities.

The second is the idea of restricting administrative expenses to 20%. If the NGO is doing research, advocacy, capacity building, networking, model building for social innovations then most of the expenses are on meetings, salaries and travel and would be clubbed under administrative expenses, which would make the organisational existence unviable. Given that most of the research, advocacy and support organisations are the ones who also work on seeking accountability from government and highlight the governance failures, this amendment makes it easy for the government to throttle civil society which challenges and asks uncomfortable questions.

The third major amendment suggests that every FCRA organisation should have their FCRA bank account in a single Delhi branch of SBI. When the country is making such tremendous strides with digital connectivity, and even schoolchildren have moved to online classes, such an approach of centralisation is beyond comprehension even to the supporters of the government. It is important to note that the bank account details were part of the approval letter in the existing Act from FCRA division, so tracking bank accounts in these digital times was being done rather easily.

Another troubling change is the enhancement of power of the investigative officers and government officials in the name of time for inquiry. Some of the earlier restrictions – like completing investigations within six months or not taking punitive actions like freezing of assets – are being done away with. This would mean arbitrary power to the government officials who for political reasons can harass or destroy an institution, which will now not have the protection of the law for such a long period that the process itself will become punishment even if later they would win the courts.

In essence the FCRA Amendment Bill, 2020, embodied the deep discomfort of an authoritarian regime with a liberal democratic architecture, in which civil society plays the role of permanent opposition by consistently holding power to account from the perspective of the most marginalised and feeble voices. Successive governments have been extremely wary of this role of civil society and it is reflected in even the initial framing of FCRA law by Indira Gandhi and amendments later by Manmohan Singh government in 2011.