FCRA amendments crippling our work, say NGOs

Members of an NGO, wearing PPE kits, cut hair of a homeless person on a footpath, amid COVID-19 lockdown.   | Photo Credit: PTI

The amendments to the Foreign Contribution Regulation Act (FCRA) enacted last year that among others made it compulsory for NGOs to open a bank account in Delhi has crippled the work of many organisations who are unable to receive foreign funds.

Registered NGOs can receive foreign contribution for five purposes — social, educational, religious, economic and cultural. An FCRA registration is mandatory for NGOs to receive foreign funds. There are 22,591 FCRA registered NGOs.

An NGO has now moved the Delhi High Court seeking exemption from the Union Home Ministry’s March 31 deadline to open an FCRA account with the SBI branch at Parliament Street here.

The petitioner argued that it applied to open the account before the March 31 deadline but the administrative delays on the part of the bank and the Ministry severely restricted its activities including providing COVID-19 related relief and paying of urgent salaries of staff and also affected its charitable and educational activities.

The court in a hearing on May 7 issued notice to the Ministry.

Abishek Jebaraj, the NGO’s lawyer, said there were many NGOs who were affected by this order and the new regulations were hampering charitable work during the ongoing pandemic.

“There is also severe inconvenience involved in submitting copies of all the necessary papers and personal documents, such as Aadhaar card copies and the KYCs of trustees and other members of the NGO. The trustees and members live in different parts of the country, and getting documents together poses immense challenges due to COVID-19 restriction,” Mr. Jebaraj said.

The NGOs continue to face problems even as the National Disaster Management Authority (NDMA) on May 6 wrote to all States to involve NGOs, faith-based organisations, religious and social trusts at local level to handle the “unprecedented COVID-19 crisis”. The NDMA held a virtual meeting with 1,000 NGOs on May 5. NDMA member secretary Sanjeeva Kumar said in a letter to States that an NGO coordination centre shall should be set up at the local level and office and other logistics be provided by the State government. The letter said the NGOs could offer their services in containment zones and other areas where curfew is imposed and special passes could be given to them.

Anil Hebbar, who runs the Bombay Sarvodaya Friendship Centre in Mumbai, said even the NGOs that had complied with the March 31 deadline were unable to receive funds as the Ministry had failed to authorise a form sent by the SBI making the NGO eligible to receive foreign funds.

“The FCRA amendments made it compulsory for all trustees to register their Aadhaar card, many do not have it, so an account could not be opened by March 31. Now the Ministry has asked NGOs to re-register by May 31 when they are already registered….how are we going to pay salaries to people and continue with humanitarian work in the face of such administrative requirements,” Mr. Hebbar said.

The FCRA, first enacted in 1976, was amended in 2010 when a slew of new measures were taken by the Ministry to regulate foreign donations. It was again amended in September last year. The latest amendment to the Act inserted a new provision that makes it mandatory for all NGOs to receive foreign funds in a designated bank account at the SBI’s New Delhi branch and the accounts were to be opened by March 31. Any other bank account can be linked to the main account but all foreign donations should be received in the SBI account. The Act also made Aadhaar a mandatory identification document for all the office bearers, directors and other key functionaries of an NGO and capped the administrative expenses at 20% of the foreign funds received, earlier the upper limit was 50%. The amendment also barred sub-granting by NGOs to smaller NGOs who work at the grassroots.

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Printable version | Jun 23, 2021 1:26:37 AM |

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