Civil society organisations (CSOs) or non-profit organisations (NPOs) in India have a history stretching back several decades. There are special provisions under the legal system that allow their functioning and ensure their compliance. In recent times, however, non-profits, including some prominent ones, have come under the increasing scrutiny of the Central government over their activities and sources of funding. One direct consequence of this has been the suspension or the non-renewal or cancellation of their licences under the Foreign Contribution Regulation Act (FCRA). The FCRA licence allows these organisations to receive and use funds from abroad.
In the second week of January, Centre for Policy Research (CPR), a 50-year-old think tank and public policy research organisation, and World Vision India, a charitable organisation working on child rights, received notices from the Home Ministry that their FCRA status had been cancelled. In effect, this meant their FCRA account was frozen. This in turn meant a drastic scaling down of their operations.
In a statement, CPR said “the basis of the decision was incomprehensible and disproportionate, and some of the reasons given challenged the very basis of the functioning of a research institution”. For instance, the publication of policy reports on the CPR website was equated with current affairs programming, which is not allowed under FCRA rules.
The cancellations follow the suspension in November 2022 and February 2023, respectively, of CPR’s and World Vision’s FCRA licences. An amendment to the FCRA allows the government to prohibit the use of FCRA funds already received or those in the pipeline if provisions of the Act are suspected to have been contravened. Earlier, such a freeze on accounts was possible only if the entity was found guilty. Now, FCRA status can be suspended for 360 days (against 180 days earlier) pending an inquiry.
CPR’s suspension was for 180 days and then extended. At the time, the following “violations” were cited: CPR had received and used foreign contributions for purposes other than those for which it was registered; it transferred contributions to entities and deposited funds in undesignated accounts; it published articles in violation of the FCRA and engaged in litigation and activism through one of its environmental projects. CPR was accused of irregularities in its accounts and of using foreign funds for “undesirable purposes” to harm Indian economic interests. CPR refuted all allegations.
In September 2022, Income Tax “surveys” were conducted in the CPR office and documents were seized. The think tank pointed out that these actions had “a debilitating impact on the institution’s ability to function”. They undermined the institution’s ability to pursue its objective of producing high-quality, globally recognised research on policy matters, for which it has been recognised for over its 50 years. It approached the Delhi High Court following its suspension and plans to continue to seek recourse in all avenues possible after the cancellation.
The organisation, “home to many distinguished faculty, researchers and members of the board”, said that it was in “complete compliance with the law and has been cooperating fully and exhaustively at every step of the process”. When the IT surveys were held at its premises, it had received several notices. It submitted responses to the department concerned and reiterated its commitment to compliance with the law. It said that it was “routinely scrutinised and audited by government authorities, including the Comptroller and Auditor General of India”, had statutory annual audits and all annual audited balance sheets were in the public domain. There was no question, it said, of “having undertaken any activity that is beyond our objects of association and compliance mandated by law”.
This story was originally published in frontline.thehindu.com. Read the full story here.