FCRA Bill and why civil society matters

SOCIETY / GOVERNANCE/ ECONOMY

Topic: General Studies 2, 3:

• Role of civil Society in a democracy. Formal/informal associations and their role in the Polity.
• Important International institutions, agencies and fora- their structure, mandate.

FCRA Bill and why civil society matters

Context: The Lok Sabha has passed the Foreign Contribution (Regulation) Amendment (FCRA) Bill 2020 regarding non-governmental organisations (NGOs) without debate.

FCRA, 2010 was enacted to regulate the acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to “national interest”.

Significance of NGOs

• Interest Aggregators and Interest Articulators: Non-profit organisations play vital role in mobilizing public attention to societal problems and needs. They are the principal vehicle through which communities can give voice to their concerns.
• Complements Government Machinery: NGOs implement and monitor the government’s welfare policies, operating at the grassroots level where the official apparatus is often non-existent.
• Hold Government Accountable: NGOs broaden government’s accountability by ensuring government is responsive to citizens at large rather than to narrow sectarian interests.
• Constructive conflict resolution: In the international arena Track II diplomacy (involving non-governmental bodies) plays a crucial role in creating an environment of trust and confidence.
• Acts as Safety Valve: NGOs also provide a voice for marginal groups and social movements, offering a safety valve that prevents the country’s millions of local mutinies from becoming uprisings.
• Enriches Democratic Functioning: NGOs foster pluralism, diversity and freedom. They also perform the role of Capacity Builders – providing education, training and spreading awareness.

Key Provision of FCRA Bill, 2020 are:

• Aadhaar has been made mandatory identification document for all the office bearers of an NGO or an association seeking foreign donations.
• Foreign contribution can now be received only in an account designated by the bank as “FCRA account” in a branch of the State Bank of India, New Delhi (as notified by the central government). No funds other than the foreign contribution should be received or deposited in this account.
• Limiting administrative expenses drawn from foreign donations to 20% as against the current 50%
• The amended Bill includes “public servant” and “corporation owned or controlled by the Government” among the list of entities not eligible to receive foreign donations

Criticism of the FCRA Bill, 2020

• The legislation may be used to target political opponents and religious minorities.
• Cripples NGO Functioning: Due to the 20% cap, many NGOs will shut shop and many people will become jobless.
• Double Standards: On one hand the government invites foreign funds, but when such funds come for educational and charitable purposes, it is prevented.
• Licence-Raj on NGOs: The Bill assumes that all NGOs receiving foreign grants are guilty and thus makes Aadhar of office bearers as mandatory requirement. 

• Open the doors for Bureaucratic Harassment: There is a thin line between enforcing transparency and using rules to allow official interference and harassment in the sector. Much of the present bill crosses that line and introduces a questionable degree of micro-management.

Way Ahead

• The government should send the bill to a select committee of the Rajya Sabha. 
• NGOs are a necessary component of civil society and this bill needs greater public debate and scrutiny.