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NGOs’ foreign funds and a trust deficit -Trilochan Sastry
-The Hindu

There is no organised conspiracy against NGOs. It is in the nature of power to exercise greater control, and exempt itself from accountability.

The recent changes in the rules governing foreign funding of NGOs under the Foreign Contribution Regulation Act (FCRA) have been widely discussed. The last word on it will perhaps never be written. The UPA government initiated this and we see some concrete changes now. Sifting through the bewildering range of issues discussed, a few stand out. First, there is a sharp polarisation on the issue between the government and civil society, and even within civil society. Second, the polarisation is based on lack of trust, bordering on fear, with each group highlighting faults of the other. Behind all this are differing ideas of India we all hold.

It is ironical that what is at stake is not that important — a relatively small amount of money that does not significantly help or harm India. The total FCRA funds coming in was Rs.11,546.29 crore for 2011-12, the latest year for which the government has put out figures. Of this, the funds for explicitly religious activities were to the tune of Rs.270.83 crore; Rs.227.4 crore for maintenance of priests, and Rs.208.71 crore for religious schools, together coming to 6.12 per cent of total foreign funding. Similarly, those that are clearly identifiable as lobbying advocacy, awareness building, and so on, are Rs.539 crore for research and Rs. 241 crore for awareness, or 6.76 per cent of total foreign funding. Even if all these funds are used for anti-national activities, what will we do if they are domestically funded? The major uses of foreign funds are for rural development, education of the poor, health, and so on. Out of 22,702 NGOs registered under FCRA, 13,193 actually received grants, making it on average Rs.87.52 lakh per NGO that year. About 9,000 NGOs have rightly got their FCRA permissions cancelled for not submitting accounts or responding to repeated reminders.

Meanwhile, there is a list of 109 international agencies that are exempt from the FCRA, consisting of the World Bank group, UN agencies, and so on. The World Bank funding in 2013-14 was $5.2 billion or about Rs.3.22 lakh crore. This funding goes to the government and not to any NGO. Indian bureaucrats are among the largest beneficiaries of World Bank and UN assignments at dollar salaries that entitle them to life long pensions after five years of deputation.

There are other foreign funds coming into India. In 2010, the RBI reported that FDI totalled $23.7 billion or about Rs.1.40 lakh crore, about 12 times the FCRA funding. By 2014-15, this had gone up to Rs.1.76 lakh crore. This is about 10 per cent of the Central government budget of about Rs.18 lakh crore. This would have been much higher but for the global slowdown, as India got $40 billion in 2008 before the global meltdown. We periodically see announcements of relaxation in FDI rules for various sectors like retail, insurance, and so on.

In short, foreign funding of NGOs is dwarfed by other foreign money coming into India. Of this, the amount used for potentially questionable purposes is about 13 per cent. Let us look at another set of issues. All organisations working in society need to be transparent and accountable, including NGOs, whether domestically or foreign funded. The RTI tries to do that for the government. But beyond the NGOs, corporates and the government, there are political parties and religious organisations.

The Supreme Court has admitted a petition saying that India’s two major political parties, the BJP and the Congress, receive illegal foreign funding. Like other major democracies, India also does not permit political parties to receive foreign funding. But no notice has been issued by the government to the political parties. One of the parties said they have returned the money, and the matter was laid to rest after that. Would other organisations, including the corporate sector and the NGOs be permitted to respond similarly? The political parties have also violated the RTI Act by refusing to comply with CIC orders.

Meanwhile, the Maharashtra Government has passed an ordinance that an FIR cannot be filed against legislators and senior officers without prior approval to avoid frivolous allegations. But there is no protection for ordinary citizens against harassment whether by the police, income tax or other authorities. The police investigate allegations against themselves and give themselves a clean chit. There is no remedy for citizens who need some permission from the government and there is no reply for months or years. The government has publicly used the phrase ‘tax terrorism,’ but has so far done nothing to protect the citizen. It is well known that several religious organisations and their affiliates receive foreign funding. Those that indulge in anti-national and subversive activities will not be affected by the new FCRA rules — their work is underground.

So we see a trend where government officers and elected representatives, political organisations and some religious organisations and affiliates are protected, but others are harassed. This is in line with some of the erstwhile Communist countries, such as Hungary and Russia, which are also clamping down on NGOs getting foreign funding. Interestingly there is no such clampdown in the West. Are we moving towards a free market economy along with totalitarian controls? The major reason that is offered for these controls is that sometimes NGOs indulge in activities that are “detrimental to national interest, likely to affect public interest, or likely to prejudicially affect the security, scientific, strategic or economic interest of the state.” This was the classic language used by the British colonials in order to justify new laws and regulations aimed at curbing civil liberties. This is not to say that no NGO ever does anything wrong. If they break the law, they should be brought to book. There are more than adequate laws to ensure that this happens.

Blanket ban

There is no organised conspiracy here. It is in the nature of power to exercise greater control, and exempt itself from accountability. Unfortunately, the Indian way of doing this has a colonial legacy — it is often through more red tape, leading to petty corruption and harassment. For a handful of NGOs who may be doing something wrong, about 13,000 are completely paralysed. It would be more honest if as a nation we take a decision to ban all foreign funding.

Behind all this is the question of the kind of India we want to build. These clampdowns are really for that. Protest against economic policies is becoming more and more embarrassing, with fallouts leading to political victory or defeat. We have to find a balance between religious freedom and its misuse, accepting funds from overseas to aid in the economy but not for civil society, and people’s interests and corporate interests. We need to hold citizens as well as governments accountable, and save both from needless harassment. Deep down, there is mistrust between the different ideas of India, with each group trying to impose its world view. Neither will succeed in the long run. Equally disturbing is the lack of trust between the people and the government. The first task really is to rebuild that trust.

(Trilochan Sastry is professor at IIM Bangalore and Founder, Association for Democratic Reforms.)