The cancellation of the Foreign Contribution Regulation Act (FCRA) license of Centre for Policy Research (CPR), one of the country’s famed think tanks, on the charges of multiple violations raises several critical questions regarding both the sides.
For CPR, which is celebrating its 50th anniversary, charges such as ‘hurting India’s economic interests’ by alleged ‘mis-utilisation of funds received from foreign sources for organising protests and funding non-FCRA entities to fight legal battles against development projects, including coal mines’ are serious.
In fact, the state surveillance of its activities has been on since 2014. On September 7, 2022 it was subjected to an Income Tax survey and its IT exemption was cancelled on 30 June 2023. It eventually got redressal, both, from the Delhi High Court and the Supreme Court. It is now left with just the Indian Council of Social Science Research (ICSSR) grant since it is one of the 24 ICSSR funded institutes.
The entities
Entities such as CPR are created by societies registered under the Societies Registration Act, 1860, passed by the British parliament. The Act exists in the Indian sub-continent as well as in some other former British colonies. It permits a group of desirous persons – presently seven in India – to register a society for literary, scientific and charitable purposes, framing a memorandum of associations (signing it too) and rules for its functioning. The Act has been partially modified in some states.
A very broad spectrum of societies is registered under this Act, that creates anomalies at times. No wonder, in cases of political dissidence, the government charges them for violating the terms of registration and memorandum of association. Late Dr Rajanikant and Dr Mabelle Arole, who founded the famous Jamkhed Rural Health Project in Maharashtra, told me during field work for my first research at CPR in 1981 that people came to them asking about strategies on how to pressurise the government and administration into bring civic amenities to their villages. Several entities face such predicament when their defined role performance creates situations for them to stick their neck out to advise people and groups at the grassroots level on how to overcome systemic resistance to change.
Also read: Centre for Policy Research Calls MHA’s Decision to Cancel FCRA Registration ‘Incomprehensible’
The UN had recognised the role of non-governmental organisations (NGOs) in rural development soon after its creation in 1945. NGOs became a major initiative for a large number of persons and groups driven by the zeal of social service. Social activist Anna Hazare’s initiatives in Maharashta’s Rale Gan Siddhi has acted as a model for many Indian activists since 1975, leading to proliferation of such entities for varied objectives.
By the 1990s there were efforts to redefine NGOs as voluntary or civil society organisations. A CPR study of 1993, of which I am a co-author, termed it as Volag (Voluntary Agency). All these organisations together have created a wide gamut of activities over decades. They have had very few funding sources within India – the Tata Trust was an exception. Corporate philanthropy has been limited in India. Foreign foundation such as the Ford Foundation emerged as major sources for most of them. Thus, foreign funding of such entities became routine in India.
The FCRA since 1976
Raising the bogey of “foreign hand”, Indira Gandhi brought the FCRA during the Emergency in 1976 and in a bid to create surveillance regime for the NGOs, put it under the Ministry of Home Affairs (MHA). For all such entities receiving foreign funds through foundations, corporate grants and so on, the FCRA license administered by the MHA became obligatory. It has not only continued thereafter, but has also become a permanent feature for the scrutiny of foreign funds for such entities. The FCRA has been amended four times since.
In 2010, in the wake of anti-nuclear protests driven by some human rights bodies in Tamil Nadu’s Kudankulam that were receiving foreign funds, the Manmohan Singh government tightened the FCRA. Yet, it did not stop the same government to consult and use them for creating a governance model using the National Advisory Council chaired by Congress veteran Sonia Gandhi.
Since the accountability of the voluntary sector in financial matters was questioned, the P.V. Narasimha Rao (1991-96) government had provided a window to them to explain, interact and cooperate with the government. Even as the voluntary sector accepted the need for accountability in view of the inevitability of foreign funding, following extensive deliberations, they suggested that instead of an instrument of surveillance and security, the FCRA should be used as one of financial accountability.
The purpose could be fulfilled by amending the Foreign Exchange Management Act (FEMA) administered by the Ministry of Finance, with some relevant clauses for the voluntary sector. This would have made it compulsory for the donors to report such funding to the MoF with mandatory annual account submission for the concerned voluntary organisations. This, they argued, would keep financial accountability without bringing in security considerations. However, this did not find favour with the government.
The questions regarding the transfer and use of the funds in other heads, including administrative heads, are more contentious. Rigid categorisation often does not work with such bodies as they do not generate a separate administrative grant. Many times, some related expenses are adjusted against foreign grants, giving the political dispensation an opportunity to ask uncomfortable questions and cancel the FCRA license, which has been resorted to in the case of CPR.
A careful look at the charges against CPR reveals the complexity of role performance that the Indian state uses to securitise studies and their dissemination process using the FCRA as an instrument of surveillance. Should an academic entity such as CPR not allow the use of its studies by activist groups to highlight the predicament of the underprivileged? How can they prevent a protest that uses its findings? A similar cancellation took place in the case of the Commonwealth Human Rights Initiative, an entity that worked on human rights and police reforms. The list is indeed long.
The distrust against the voluntary sector
CPR and such institutions have been under scrutiny for years, irrespective of their emergence as an important segment of international developmental initiatives. However, since they are a significant part of international and the Indian social life, they must function within the structures of accountability created by the government, which must also be uniform and transparent.
The love-hate relationship between the government and the NGOs has continued in India with each regime. In both its avatars, the UPA had selected organisations as part of the NAC, but neither the FCRA was relaxed, nor other enabling reforms undertaken for the sector. In fact, in 2013 the MHA tightened the FCRA by imposing prohibitive conditions for donors. Several programmes had to be folded up mid-way. The NDA government since 2014 has followed the same path and they became even more severe in 2019.
Ajay K. Mehra is a political scientist. He was Atal Bihari Vajpayee Senior Fellow, Nehru Memorial Museum and Library, New Delhi, 2019-21 and Principal, Shaheed Bhagat Singh Evening College, Delhi University (2018).