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Union Govt restricts funding for 10 NGOs working on environment, child's rights: Report

Ten International Organisations Have Been Added To The Prior Reference Category Under The Foreign Contribution Regulation Act.

Screenshot 2021-09-15 010139
Photo: Reuters

The Union government has imposed restrictions on funding for ten international non-governmental organisations working on environmental issues, climate change and child’s rights, The Hindu reported.

According to an internal Reserve Bank of India notice from July 1 of this, the foreign NGOs had been placed in the Prior Reference Category (PRC)  of the Foreign Contribution Regulation Act (FCRA), 2010. 

This implies that when a foreign donor wants to transfer money to a recipient association in India (which is in the PRC), the donor will require the prior clearance of the Ministry of Home Affairs (MHA).

These NGOs include the Omidyar Network International, the Stardust foundation and Humanity International from the United States; the Walk Free Foundation and the Minderoo Foundation from Australia; the Children’s Investment Fund Foundation, the Freedom Fund and the Laudes Foundation from the United Kingdom; the Legatum Fund, based in the UK and the United Arab Emirates; and the European Climate Foundation.

This group of organisations joins the 80 NGOs already in the PRC.

The Hindu cited a notice which a private bank had recently sent out to its branches. This notice cited RBI directions which required any funds coming from specified donor agencies to individuals or organisations in India to be brought to the MHA to receive clearance from the ministry’s “Foreigners Division of the FCRA wing”.

When the paper asked a government official why so many climate organisations had been put on the list, the response it received noted that climate NGOs were “creating noise in the media” through their advocacy against the use of coal. The official considered this a “violation of FCRA provisions”.

The FCRA was amended on September 20, 2020, following which leading organisations had remarked that the new provisions would severely impact the livelihoods of workers of small NGOs and would ultimately lead to the “killing” of the entire sector.

The amendments introduced a provision which prohibited foreign contributions from being transferred to any person who is not also registered to accept foreign contributions, meaning funds can no longer be transferred to smaller NGOs operating at the grassroots level. Person here refers to an individual, association or registered company.

The amendments also restricted the use of foreign contributions for administrative purposes down from 50% to 20%. Further, the period for which the government could suspend a person’s registration was expanded from the earlier 180 days to include an additional 180 day period.