Foreign funding for Indian NGOs: thousands still unlicensed

After the international outcry, only a handful of organisations, including Mother Teresa's nuns, have had permits, which expired at the end of 2021, renewed. How the Foreign Contribution Regulation Act works and why it affects small organisations in particular. A local operator: "The Modi government is telling everyone: You may work here only by our kind permission". 

Milan (AsiaNews) - The non-profit sector in India has been in serious difficulty since the end of the year: around Christmas almost 6,000 non-profit organisations, including the Missionaries of Charity, were refused authorisation to receive funds from abroad by the special office under the Ministry of the Interior.

The international outcry caused by the affair meant that Mother Teresa's sisters were able to obtain a renewal of this permission in a matter of days. Thousands of other NGOs, however, continue to be at the mercy of the decisions of Indian bureaucracy. Of the more than 22,000 NGOs that were admitted on 31 December 2021, only 16,888 are considered "in order" by the Indian government.

And - despite the protests - in the last three weeks the situation has been unblocked for only a handful of associations. So much so that on Monday 24 January the Indian Supreme Court in New Delhi will discuss an emergency petition presented by the Global Peace Initiative asking that all organisations providing humanitarian assistance be exempted from the licence, at least for as long as the covid emergency persists.   

But what is the root cause of the problem? The Foreign Contribution Regulation Act (FCRA) was passed in 2010 to regulate the licensing of foreign funding. After it came into force in 2011, 20,675 NGOs lost their licenses, but 80% closed down after 2014, when Prime Minister Narendra Modi came to power.

At the moment, the law stipulates that in order to receive donations and funding from abroad, all non-governmental organisations must open an online account at the main branch of the State Bank of India (SBI) in New Delhi. This action is certainly simple for large international NGOs," says an AsiaNews source, "but makes things much more complicated for small NGOs operating in rural and marginal contexts."

Our source goes on to explain what the government intends by the measure: in India it is not unusual for small fraudsters to ask for funds from abroad for international cooperation activities but then actually pocket the money. Even respected organisations that have been operating in the country for years carry out continuous internal checks to expose the misuse of donations.

Thus, with the creation of a traceable bank account in the country's largest bank, New Delhi says it wants to reduce illegal acts involving the creation of mostly fictitious organisations. Thus, it is now possible to carry out development cooperation activities only after opening a current account with the SBI in Delhi and after analysing the documentation submitted by the NGO. This is an assessment that Indian bureaucracy (which has never been particularly efficient, comments the source) had always conducted very loosely.

However, looking at the data from recent years, the Indian government's version does not hold up: it seems highly unlikely that in a country as huge as India, there were 6,000 out of 22,000 NGOs misusing foreign funding. Moreover, the Ministry of the Interior's website does not specify why the licence was refused: next to the organisation's name appears only the year in which it was revoked and the words 'on violation'.

It is not even clear what will happen to the funds that are frozen: the 2020 amendments authorise the government to take possession of foreign money if an NGO renounces its FCRA licence or does not apply for its renewal. But the legislation does not specify what happens to the funding if the government refuses to grant it. There are currently about 13,000 non-profit organisations waiting for their licences to be renewed.

The reality of the situation then seems to be different: the ultra-nationalist government of Narendra Modi is annoyed by the presence of associations that care for the poor, orphans and the sick, because they contrast with the narrative of great power to which India aspires. 21% of India's population - 400 million people - live below the extreme poverty line (i.e. on less than .90 a day), which is unacceptable for a country that has a nuclear bomb, often flexes its muscles at Pakistan and tries to make room for itself on the Asian continent in an attempt to counter Chinese influence.

They want to sweep the fact that "in this country there are people who live by killing rats and earn 10 rupees per rodent" under the carpet, says the AsiaNews source.

The work of religious associations is viewed with even greater annoyance, which not only collide with the muscular politics of Modi's Bharatiya Janata Party, but, in the PM's view, undermine the Hindu identity, considered an essential feature of the nation.

The decision to grant a licence to Mother Teresa's nuns, the source concludes, seems to be a warning in the end. What the government intends to say to everyone is: "You are and work here only by our kind permission".

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