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THE honeymoon between the NGO sector and the UPA government seems to have hit a roadblock. A few months ago, a national policy for the voluntary sector drafted by NGOs and the Planning Commission, was generally welcomed by the voluntary sector. It eased regulation for them. The government, it seemed, was keen to work with the voluntary sector. (Civil Society August 2006).

But now NGOs are up in arms against the government. They say provisions of the new Foreign Contribution Regulation (FCR) Bill 2006 which would replace rules in the old Foreign Contribution (Regulation) Act (FCRA) will make it hard for them to work. Currently the Bill has been referred to a Standing Committee of Parliament.

A campaign against the new Bill is being led by the Voluntary Action Network of India (VANI), a network of several grassroots NGOs. They held a press conference in Delhi, where Delhi-based NGOs also took part.

The voluntary sector is upset about five provisions in the Bill. First, it says voluntary organisations that are ‘of a political nature’ will not be able to get foreign funds. The Central government will decide whether an NGO is political after examining its activities, ideology, programmes or association‘with activities of any political party’.

“It is quite difficult to define what is political,” said Rajesh Tandon, director, PRIA. “Organisations working to empower people, for human rights, advocacy and networking can be termed political. If you don’t toe the line of the government in power, you could be blacklisted under this provision.”

Secondly, the new FCR Bill states that the Central government will provide a certificate of registration or prior permission for an organisation to receive foreign funding only if it is satisfied that the NGO has undertaken meaningful activity in its chosen field for the benefit of the people or has prepared a meaningful project for them. It is up to the government to decide what exactly is meant by ‘meaningful’.

Thirdly, the Bill will require recipients of foreign funds to renew their registration every five years. It introduces fees for registration, renewal and prior approval. At present, registration under the old FCRA is permanent and free.

“Renewal provisions such as these are completely unnecessary because all NGOs, whether or not they receive foreign funding are subject to audits and financial scrutiny under existing legislation such as the Income Tax Act. The registration renewal requirement will cause uncertainty, inconvenience, and more seriously, harassment by petty bureaucrats,” says Pooran Chandra Pandey, CEO, VANI.

Lastly, the new provisions currently limit the amount of money that NGOs can spend on administrative expenses to 50 per cent. VANI pointed out that not all NGOs carry out projects for the grassroots. There are many who do research and advocacy and therefore need to spend more on administration. Then, the new Bill prohibits ‘any association, company, correspondent and editor engaged in the production or broadcast of audio/audio-visual news or current affairs programme through any electronic mode from receiving foreign contribution.’

“This contrasts starkly with the governments own policy of liberalising the economy,” said Rajesh Tandon. FDI norms have been eased for the print media and for private FM radio channels.

The voluntary sector points out that the government is laying out a red carpet for foreign investors. In stark contrast, foreign funding for NGOs is being restricted. The voluntary sector would like foreignfunding to be regulated in the same manner as FDI.

It is obvious that the government is concerned about misuse of funds. In the national draft policy for the voluntary sector, the government had agreed to ‘self regulation’ for the sector.

If the government wants to curb corruption, there are other ways of clamping down on rogue NGOs, instead of harassing the entire sector. For instance, there is the Unlawful Activities Prevention Act 1967, the Prevention of Money Laundering Act, 2002 and the Foreign Exchange Management Act, 1999.

Like companies, NGOs too have to follow laws. It is the job of the Intelligence Bureau (IB) or the home ministry to investigate if money is being routed to terrorist outfits in the guise of foreign funding. Neither the FCRA nor the FCR Bill is necessary for this task, feel the NGOs.

Pooran Chandra Pandey, CEO, VANI, spoke to Civil Society.

Why has the voluntary sector not come up with a blueprint for self-regulation?

The voluntary sector is highly diverse. More than 70 per cent of NGOs work in villages, reaching the last mile post. They should have enough freedom to do their work. They adhere to all laws through a two-way process. First, they are accountable to their funding agencies. Secondly, they are answerable to their constituencies or the people they work for. They do abide by self-regulation. But it’s tough for them to sit together and chalk out a common plan of action. A common code of conduct is difficult to evolve. All we need is autonomy and independence in our working environment.

But what about corrupt NGOs?

There are enough laws to tackle these NGOs. The government is free to take any action against the black sheep. The government can force them to reregister and punish them. But it cannot come up with a law that punishes all.

There are NGOs who spend more than 70 per cent of their funds on salaries, vehicles and rent. What about them?

Certain NGOs doing advocacy, research and networking have to spend a good amount on administrative expenses as their job is to meet people and use mass media. Earlier, the limit on administrative expenses was 30 per cent. Now after we made presentations to the government, it is being raised to 50 per cent and can even go higher with prior permission. Besides, these NGOs are in a dilemma. If they don’t pay good salaries, they don’t get professionals.

There are NGOs who merely act as fronts of political parties.

The government must define what is political and what is not. You cannot keep this as an open-ended question as it can become a tool for harassment.

There are IB reports that foreign money for some NGOs ended up in terrorist activities.

There was no such report. It was only a suspicion as some NGOs do not report to the home ministry since they don’t receive any foreign money. There are about 32,000 NGOs that have FCRA, but only about 18,000 receive foreign money. Then, money to terrorist activities doesn’t flow through normal channels. NGOs have to get money in one bank account and report it to the home ministry. We’re saying that the government should first sensitise NGOs to do regular reporting. If they don’t follow these rules, take action against them and cancel their registration.