By Pradeep S Mehta
A survey done by Institute of
Rural Management, Anand showed that FCRA is an ineffective
legislation as it controls only $2 billion, which is only
about two per cent of the total foreign funds. So why should
the voluntary sector be singled out for money-laundering?
Successive governments at the
Centre and in the states in India have been wooing foreign
investors. This is because foreign investment will help to
fill the gap in raising resources domestically, albeit
Indian businesses too are exporting capital following a
liberalised foreign exchange regime.
The foreign exchange regime was
governed under the Foreign Exchange Regulation Act, 1973,
which has been replaced by a softer Foreign Exchange
Management Act in 1998 by the Vajpayee government following
a positive balance in our foreign exchange kitty. On the
other hand, another regulatory law in the realm, the Foreign
Contribution (Regulation) Act, 1976 (FCRA), is applied to
regulate foreign donations to the voluntary sector in India,
which has been in headlines over time in so far as trust is
concerned. While on the one hand the government often
co-opts the voluntary sector to create awareness and enhance
the success of its welfare schemes, on the other hand, it
uses tools like the FCRA against the sector. The FCRA is
increasingly being viewed as an instrument to silence
dissent by selective and general targeting of non-government
organisations (NGOs) thereby shaking the very tenets of
democracy.
The FCRA is one of the few
remnants of the “Emergency” era, which was first enacted in
1976, to check the presence of then perceived “foreign hand”
in the activities of the Opposition parties and remains one
of the few laws that have not been liberalised in the reform
agenda.
That FCRA is yet to be
streamlined is evident from the fact that though it has been
in existence for close to four decades, the nodal agency
(ministry of home affairs — MHA) or anyone else for that
matter, is not even aware as to how many of the 43,000 NGOs
registered under it still exist. The government now intends
to check the backgrounds, records and work of about 30,000
NGOs in 2016 to decide whether they can continue to receive
grants under FCRA and has made it mandatory for NGOs to have
the FCRA certification renewed every five years. This
reflects the prevailing lackadaisical process of receipt and
scrutiny of annual FCRA returns.
The act was amended in 2010, but
the voluntary sector views it as a lever to suspend or
cancel clearances under the garb of national security and
public interest with the latter not having been defined
anywhere. Here again, the infirmities in the act and the
dubious actions taken thereunder, strengthen the growing
feeling of the NGOs being targeted and are for all to see
and interpret. Even the judiciary has often taken a view
contrary to that of the government.
Responding to a writ petition,
the Delhi high court passed a landmark judgment in September
2013, quashing a home ministry order that suspended the FCRA
licence of the Indian Social Action Forum (INSAF). INSAF is
a network of more than 700 grassroots organisations and
people’s movements. According to the MHA, the activities of
INSAF were “prejudicial to public interest” and hence its
bank accounts were frozen and licence suspended. Setting
aside the MHA order, the Delhi high court ordered that, “if
the government decides to suspend an organisation’s
certificate, it can only do so for reasons recorded in
writing, which need to be incorporated in the suspension
order itself.”
It may be recalled that INSAF
filed a petition in the Supreme Court in May, 2011
challenging Sections 5(1) and 5(4) of the FCRA arguing that
these are ultra vires and violative of Articles 14,
19(1)(a), 19(1)(c) and 21 of the Constitution.
A few weeks back the Delhi high
court ordered the Centre to unblock about Rs 1.87 crore sent
to Greenpeace India by its parent organisation in Holland
and pulled up the MHA for its “very uncommon” investigations
in the activities of the NGO. The court also took a dim view
of the MHA failing to issue notice, listing the charges
against Greenpeace, and not giving the latter a chance to
respond. It is relevant that the decision came within days
of offloading of a Greenpeace activist from a flight to the
UK where she was to address British MPs.
Therefore, the question as to
why NGOs are singularly targeted for maligning is relevant.
After all, the voluntary sector is credited with some
outstanding achievements, such as, Right to Information, Jan
Lokpal, eradication of leprosy, DOT treatment for
tuberculosis, joint forest management and watershed
development, etc. At Consumer Unity & Trust Society (CUTS),
we too have been working on economic reforms and better
management of our economic governance system aided by
foreign donations and surely added to the growth. Further,
potentially anti-development and anti-nationalistic
activities could also arguably be funded through hawala,
domestic and foreign funds coming in through routes other
than FCRA.
A survey done by Institute of
Rural Management, Anand in October 2012 showed that FCRA is
an ineffective legislation as it controls only $2 billion,
which is only about two per cent of the total foreign funds
that come into the country. So why should the voluntary
sector be singled out for money-laundering, the study asks.
Better monitoring mechanisms are required rather than
curbing, it said.
Few would disagree that
anti-nationalistic activities should be dealt with severely
— whether it is by the voluntary sector or any other sector
— but on conclusive evidence. For example, the recent Budget
proposal to treat black money holders as criminals. Second,
transparency in the functioning of the voluntary sector and
regulation of foreign funds is also not in dispute. But
finally, an archaic law that hinders the flow of inward
investment for economic and social development and leaves a
huge scope for its interpretation in the hands of the
executive needs an impartial and contextual review, if not
its scrapping altogether.
“It profits us to strengthen the
nonprofits,” Peter F. Drucker, the famous management guru
said in the Wall Street Journal in 1991 — an analysis that
holds good even today!.
The writer is secretary-general,
CUTS International. Rajeev Mathur of CUTS contributed to
this article.
This news can
also be viewed at:
http://www.asianage.com/
http://epaper.bhaskar.com/
|