Where on one hand, millions are being raised globally to help a 1.4 billion-strong nation sail through its most crippling crisis, on the other, the non-profits in India are reeling under a severe paucity of funds.
- The Foreign Aid Regulations brought in by the Indian Government are limiting essential medical supplies to patients in dire need of oxygen concentrators.
- The recently amended Foreign Contribution (Regulation) Act (FCRA) is proving to be a “death blow” to NGOs in the country.
- The Non-Profit Organisations have been battered by not just the incumbent Modi Government but has a history of abuse dating back to Indira Gandhi’s Govt.
- Will the Indian Govt. temporarily relax foreign aid restrictions as part of Covid-19 relief measures?
As a devastating Covid-19 surge pushes India’s ecosystem to a brink, the world is not only sitting up to take notice but also rallying to help. From individuals to corporations and non-profit groups, efforts are being made at several different levels to raise millions of dollars to help the country through monetary aid and medical supplies.
On the home turf, NGOs involved in relief work, helping to arrange oxygen cylinders and medical supplies on the ground, find themselves stretched thin for funds. The Hemkunt Foundation, for instance, that has been actively helping patients in and around New Delhi wants to expand operations to Mumbai and other cities but hasn’t been able to do so for want of funds.
So, where on one hand, millions are being raised globally to help a 1.4 billion-strong nation sail through its most crippling crises, on the other, the non-profits in India are reeling under a severe paucity of funds. This stark disconnect can be attributed to our recently amended foreign aid regulations that make it harder for domestic NGOs to receive aid from international donors.
The Foreign Contribution (Regulation) Act Amendments
In September 2020, in its characteristic style of capitalizing on the element of surprise in policy-making, the Modi-led government passed an amendment to the Foreign Contribution (Regulation) Act (FCRA), exponentially limiting international charities that can donate to Indian non-profits, eliminating the provision of redirecting funding and placing stricter conditions of eligibility on NGOs to receive foreign aid.
In other words, the sweeping changes to the foreign donations law effectively choked foreign aid at a time when the country most needs it. The amended version of FCRA has ensured that most NGOS cannot accept donations without landing in a legal quagmire, as well as smothered them with red tape. To be eligible to accept international donations, NGOs need to open accounts with the government-owned State Bank of India, besides getting affidavits and notary stamps made.
This is in addition to the already existing provisions that make it mandatory for NGOs to obtain a license under FCRA to be eligible for receiving foreign aid. The licensing process in itself is elaborate and complex, making it difficult for smaller NGOs to meet the eligibility criteria.
The effects of this amendment have been far-reaching, as it stripped thousands of NGOs of reliable sources of funding almost overnight. That too at a time when their resources are already stretched thin owing to the relief work during the pandemic, which PM Modi had exalted them to partake in.
India’s Fraught Relationship with Non-Profits
Justifying the latest FCRA amendment, the government had argued that the new provisions of the law would ensure compliance, improve accountability and strengthen monitoring of the non-profit sector. However, this is not the first government to take that stance. India’s relationship with its NGOs has largely been fraught. Previous governments too have taken measures to regulate foreign aid. The FCRA was passed by Indira Gandhi’s government in 1976 to curtail foreign influence in domestic operations. In 2010, the law was amended to provision stricter curbs.
In 2015, the Modi government further tightened these restrictions under FCRA in the name of national security, specifically tackling funding from charitable groups such as the Ford Foundation. By far, the amendments introduced last September – including disallowing re-granting of foreign aid – have been most crippling, with the NGOs describing it as a ‘death blow’.
Watch: Modi Government’s history of mass crackdown on NGOs
Funds in Limbo
Google has announced INR 135 crore funding to help India battle the pandemic, which included an INR 20 crore grant to the NGO GiveIndia. Amazon has partnered with NGOs and industry players to supply oxygen concentrators and other medical equipment. Vinod Khosla, the co-founder of Sun Microsystems, has offered to help with oxygen supply. Several Hollywood celebrities have begun online fund-raising initiatives, in collaboration with organizations like GO Campaign, to raise money from the grassroots to help with medical supplies, medicines, vaccinations, PPEs and more.
The American India Foundation, one of the biggest US-based non-profits working with affiliates in India, raised $23 million to aid COVID relief in the country. On May 5, it was able to wire $3 million from that money, and even that has been caught in the red tape introduced by the new FCRA amendment.
In a letter written to Indian and US authorities, shared with the New York Times, a group comprising 13 NGOs has written that the new law has ‘paralyzed’ the Indian non-profit ecosystem. There have also been requests to temporarily relax foreign funding restrictions until the Covid-19 storm passes, citing the precedence of similar steps having been taken during the devastating Bhuj earthquake of 2001. However, the government is yet to take a call on the request.
Meanwhile, PM Modi and his govt continue to focus on encouraging contributions to public charities such as PM Cares Fund – which has been mired in controversy owing to its lack of transparency and accountability.
At a time when countless people are losing their battle against Covid-19 due to lack of basic facilities like oxygen and medicines, foreign aid in the form of money or medical supplies can mean the difference between life and death. However, financial accountability appears to be more valuable to this government than human life.