No legal bar

THE leaked report of the Intelligence Bureau (I.B.) reveals nothing about the legal framework under which non-governmental organisations (NGOs) operate, and whether there are inadequacies in it that limit the government’s power to regulate their activities, and make them accountable. The report, in other words, can be taken as an admission by the government that there is nothing illegitimate about the funding of these NGOs, although the government is unhappy about their activities.

The report can also be considered as a means of communicating the government’s helplessness in enforcing the existing laws against NGOs, if at all some of them are found to be violating the relevant legal provisions governing their activities. Therefore, the listing of various examples of development activities which suffered on account of NGOs’ protests is probably aimed at preparing the ground for action against them and forming public opinion in such a way that the action is not construed as anti-democratic by the civil society.

The motives behind the leaking of the I.B. report notwithstanding, the facts regarding the funding of NGOs, and the existing legal framework which helps the government to regulate them must be carefully considered. In Parliament, members routinely ask questions about the functioning of NGOs and how Ministries are monitoring and regulating them. In 2013 itself, there were at least five instances when the Union Ministry of Home Affairs (MHA) came out with detailed responses in the Lok Sabha to questions from members. These answers, mostly given by the then Union Minister of State for Home, Mullapally Ramachandran, help one understand the extent of the problem being dealt with by the government, and civil society. The issue, it appears, is not one of governance, but governability.

The Home Ministry deals with those NGOs that have received funds from foreign countries.

The legal framework of funding NGOs is provided by the Foreign Contribution Regulation Act (FCRA), 2010, enacted to replace the FCRA, 1976, which was considered unsatisfactory by most stakeholders. While the old Act was enacted during the Emergency, amidst the then government’s publicly declared suspicions of a “foreign hand” trying to destabilise the political system of the country, the new Act came into force with a political consensus behind it, with almost all political parties sharing the distrust about NGOs receiving foreign funds.

On August 6, 2013, Ramachandran, in response to questions from several members, revealed figures about foreign contribution received by associations registered and associations that were granted prior permission under the FCRA, 2010, as follows:

In 2009-10, a total of 22,401 NGOs received foreign contribution amounting to Rs.10,43,522.09 (in lakh). In 2010-11, a total of 22,993 NGOs received foreign contribution amounting to Rs.10,34,358.43 (in lakh). In 2011-12, the number of NGOs receiving foreign contributions declined to 21,804, but the amount of contributions they received from abroad went up substantially to Rs.10,58,195.61 (in lakh).

On the basis of the complaints of various violations of the FCRA, 24 cases were referred to the Central Bureau of Investigation (CBI) and 10 cases were referred to State police for investigation in respect of 2011-12.

Reporting mechanism

More important, 21,493 associations were found to have not submitted annual returns for the years 2006-07, 2007-08 and 2008-09. NGOs are required to submit annual accounts for each financial year within a period of nine months from the closure of the financial year, that is, by December 31. Such annual accounts are to be submitted in the prescribed format duly audited by a chartered accountant. The FCRA provides for a reporting mechanism for the recipients of foreign contribution as well as the banks. These reports are scrutinised and wherever required, physical inspection is conducted. On the basis of the findings of the inspection team, appropriate action is taken.

The government thus sent letters to NGOs that did not submit annual accounts asking them to explain why they should not be directed not to accept foreign contributions without the prior permission of the Central government as per the provision of the FCRA. They were asked to reply along with postal proof or any other proof, if any, of having sent the reply within the stipulated period. In respect of 4,138 associations, the letters dispatched from the Home Ministry were returned undelivered by the post offices as the addresses were not found. After due consideration by the competent authority, the registrations of these associations under the FCRA were cancelled.

Among the States and Union Territories, Delhi, being the National Capital Territory, is the natural home of many NGOs that receive foreign contributions. It also tops the list of States/U.Ts receiving the highest total amount of foreign contribution. Thus, during 2011-12, the 1,417 NGOs in Delhi received Rs.2,06,757.82 (in lakh). Tamil Nadu has always occupied the first position in terms of the number of NGOs receiving foreign contribution. In 2011-12, Tamil Nadu’s tally was 3,220, and the amount of foreign contribution received by them was second only to Delhi’s—Rs.1,58,468.63 (in lakh).

In response to another question on the same day, Ramachandran revealed that the government had prohibited 70 associations from receiving foreign funds and frozen the accounts of 37 associations for violation of the FCRA. It is not clear whether the government followed the due process of law in these 70 cases, and provided the NGOs the opportunity to rebut the allegations of FCRA violation before prohibiting them from receiving foreign funds.

In a recent case, the Madurai Bench of the Madras High Court set aside the prohibition imposed by the Centre on Rural Uplift Centre, an NGO, from receiving foreign funds, and directed the Central government to take action after following the principles of natural justice, by hearing the NGO accused of violating the law. ( T. Mano Thangaraj vs The Deputy Secretary to Government of India , decided on October 16, 2012). In Reach in the Nilgiris vs Joint Secretary in the Government of India , the Madras High Court had delivered a similar judgment on January 31, 2011, directing the Central government to follow the principles of natural justice before freezing the accounts of the NGO.

Both the FCRA and the rules framed under it enable the government to monitor the receipt and utilisation of foreign contribution received by any person, including NGOs. NGOs can receive foreign funds after registration or with prior permission. Every application from NGOs in this connection is decided on the basis of inputs from the security agencies. The annual accounts submitted are scrutinised and, wherever required, physical inspection is conducted.

Therefore, it is curious that the leaked I.B. report refers to utilisation of funds by the NGOs for purposes other than what they were meant for. In the Lok Sabha, the previous government had not come out with details of the charges against the defaulter NGOs except in one or two cases. For example, there is no information about how many of the 24 cases being dealt with by the CBI are those involving funds misutilisation. It is also not clear how many of them may be allegedly guilty of non-submission of annual accounts as required by the Act. Indeed, none of the 24 cases with the CBI or the 10 cases with the State police agencies involve any prominent NGOs mentioned in the leaked I.B. report.

On the contrary, the government admitted on March 12 last year, in response to another question in the Lok Sabha, that there was no information as to whether foreign intelligence agencies had funded NGOs in the country to encourage subversive activities. The government, citing this lack of information, also denied that it had any plans to amend the FCRA to give harsher punishment to the guilty.

In a sense, the Narendra Modi government appears to entertain the same degree of suspicion and paranoia exhibited by the previous government regarding NGOs espousing environmental concerns in development projects undertaken by the government. Former Prime Minister Manmohan Singh once referred to unnamed NGOs running the campaign against the Kudankulam nuclear project. The previous government, while publicly giving expression to its suspicions of the NGOs, stopped short of taking action against them for fear of alienating public opinion on the issue.

However, the Modi government, in a clear exhibition of its alliance with corporate interests, has unabashedly targeted the Green NGOs. According to reports, the MHA has directed the Reserve Bank of India to keep on hold all foreign contributions originating from Greenpeace International and Climate Works Foundation—two principal contributors to Greenpeace India Society—until individual clearances are obtained from the Ministry for each transaction.

The RBI has also been asked to direct banks to this effect. That the government has chosen to act selectively against Greenpeace merely on the basis of the I.B. report, without any allegation of violation of the Act by the NGO, is a cause for concern, and is suggestive of arbitrariness as Greenpeace has not been formally heard by the government with regard to the allegations against it. Obviously, the government has no prima facie evidence against Greenpeace, apart from vague assertions in the I.B. report. The Central government’s action is unlikely to pass judicial scrutiny, if the judgment of the Madurai Bench of the Madras High Court in the Rural Uplift Centre case and that of the Madras High Court in the Reach in the Nilgiris case are any indication.