Enacted with the constructive intent of regulation of foreign contributions received by individuals, associations or companies, the Foreign Contribution (Regulation) Act came into force in 2010 so as to enable transparency in the process of utilisation of funds received.
This Act widely took into its ambit any recipient individual, association or company of foreign contribution of value or worth beyond what would be notified by the Central Government, which currently rests at Rs. 25,000.
However, the stern legal framework of the 2010 Act has defied pragmatism by establishing sky-scraping hedges in the creation and functioning of civil societies and non-governmental organisations in India that are working parallelly and cumulatively with the government towards the achievement of varying public purposes.
In the current monsoon session of the Parliament, the Foreign Contribution (Regulation) Amendment Act, 2020 was successfully passed and enacted with due presidential assent which was received on 28th September 2020.
This Amendment Act is composed of rigidifying provisions that make the spectrum of formation and functioning of civil societies narrower. It fastens the 2010 Act with auxiliary elements of bureaucracy in the governance of recipients of foreign contribution, of which the most adversely impacted strata of stakeholders are civil societies and NGOs.
Vide the Amendment Act of 2020, the scope of the Act has been stretched to include “public servants” in accordance to the status accrued to them vide Section 21 of the Indian Penal Code, 1860, who shall also be prohibited from receiving any foreign contribution.
Also, the purveying of Aadhar number for Indian nationals and passport or Overseas Citizen of India card for foreigners has been made a condition precedent for the application for registration or renewal of registration of all key functionaries of the organisation seeking permission.
A more debatable novice attribute of the Amendment Act is the absolute bar on transfer of funds even to a person who is registered to obtain such funds. This poses severe hinderances in the working of small NGOs and collaborative research groups working at grassroot levels of the social issues with the financial aid of well-established NGOs funded by means of foreign contribution.
The financial liberty of the stakeholders has been further curtailed by the condition posed in the Amendment Act which eliminates all other banks but permits the transactions of foreign contribution to take place strictly in an account with the State Bank of India, New Delhi, which shall be designated as an “FCRA Account”.
Despite of the refractory provision of the 2010 Act which seeks persons or groups to reregister themselves regularly in the span of six months, the government has reserved for itself the right to conduct an inquiry at its own discretion before granting the renewal.
Furthermore, the government has saved itself the option to restrict the usage of unutilised funds as well as permit the surrender of registration certificate when a subject of this Act is believed to be contravening the provisions of this Act. Also, the Amendment Act has extended the period of suspension by 180 days over and above the period of 180 days as was allowed by the Act of 2010.
This leaves open the floodgates for exploitation by means of bureaucratic corruption, thereby causing undue difficulties in the functioning of social workgroups and massively discouraging the fulfilment of public purposes.
Another provision in the Amendment Act that demoralises civil societies and social workgroups from working towards public welfare is the reduction of the limit of permissible administrative expenses down to 20% from 50% as was laid down in the 2010 Act.
This substantial decrease would severely impact the mechanism of civil societies and NGOs due to lower paying capacity, thereby leading to laying off and inefficient working of such groups.
An instance of the exercise of overly authoritative law regimes for the governance of social workgroups and NGOs is the exit of a prestigious human rights organisation, Amnesty International, from India.
The probe by means of immoderate raids at the premises of Amnesty International India as well as the residence of its Director by the Enforcement Directorate ranging to as long as 10 hours began in 2018, followed by notices issued by the Income Tax Department in 2019 to ordinary donors of Amnesty International India.
This had already unenthused the fundraising campaigns of the organisation as the donors were intimidated despite of the Department’s inability to find any irregularities.
Later in the same year, the office premises of Amnesty International India as well as the Director’s residence were again raided but by the Central Bureau of Investigation in lieu of alleged violation of Foreign Direct Investment norms with reference to the 2010 Act.
The situation had recently been aggravated when Twitter was notified in April 2020 by the Cyber Crime Police Station, Lucknow, Uttar Pradesh to furnish information about Amnesty’s Twitter account.
Amnesty International India finally announced its egress from India on 29th September 2020, one day after the Amendment Bill gained the assent of the President of India.
This series of allegedly arranged outline of misfortunate events that took place to hinder the smooth functioning of Amnesty International India’s work towards the attainment of human rights by all persons unambiguously depict the toiling state of weak governance and excessively rigid legal regimes that encourage red-tapism by means of assignment of unfettered discretionary authority with the state.
The introduction of such capacious and inequitable policy measures in the legal infrastructure of the nation, especially as regards the regulation of civil societies, social workgroups and NGOs working in philanthropic dimensions, not only invites red-tapism owing to proliferated bureaucracy, but also exceeds beyond the permissible corners of the Constitution of India by going against the spirit of the fundamental right to freedom of forming association as guaranteed under Article 19(1)(c).
The Foreign Contribution (Regulation) Act, 2010 itself being an Act delimiting the extent of creation and operation of lawful recipients of foreign contribution under the said Act makes any overhead strictness unnecessary and uncalled for.
Such autocratic regimes dissuade the social spirit of the nation as well as annihilate the inclination of some of the most promising international social work organisations from spreading their operations in India.
Our country, being a member state of the United Nations Human Rights Council, must facilitate to the exigencies of human rights violations with the help of civil societies and NGOs by catering to them the most adequate and fair regulations instead of witch hunting legal regimes that ultimately lead to the retreat of international human rights preservation organisations.
(The author is a student at Amity Law School, Delhi)