Under Modi government, foreign funding of NGOs has come down

This was published by Newslaundry on May 20, 2016. Sunil Abraham gave inputs.

It was in 2015 that reports started coming in of non-governmental organisations (NGOs) being targeted by the Indian government. However, according to data from the Ministry of Home Affairs, the state’s crackdown onNGOs’ foreign funding appears to have started within weeks of Prime Minister Narendra Modi taking charge in 2014.

During 2014-15, foreign contributions to NGOs in India came down by more than 30 per cent compared to the previous year. The number of organisations receiving foreign funding too declined. Foreign contributions came down from Rs 13,115 crore in 2013-14 to Rs 8,756  crore in 2014-15, according to information obtained under the Right to Information Act by 101reporters for Newslaundry.

In 2013-14, Delhi had received the highest amount of funding from the foreign donors, but in 2014-15, it registered a dramatic decline by almost 50 per cent in 2014-15. Other states that registered massive declines include Tamil Nadu and Andhra Pradesh.

“The cutting down on funding for NGOs are mostly a political step to shut up the voice of certain section in the society,” a senior official at Indian Audits and Accounts Service, with the Comptroller and Auditor General of India’s office. “But sometimes irregularities are found in NGOs working and violate certain rules prescribed by the law.” The official shared this view on condition of anonymity.

While the newly-installed government led by Modi has clamped down on foreign funding to NGOs, it wasn’t acting any differently than other governments. The Economist wrote on Sept 13, 2014, soon after the Modi government took charge, “Indian NGOs have needed government approval for foreign donations since 1976, in response to what Indira Gandhi, then prime minister, thought was the “foreign hand” of the Federal Bureau of Investigation (FBI) of US meddling in her country’s affairs.” Anxieties about the role of foreign donors is evidently an Indian tradition. The Economist further wrote, “Recent reports of an intelligence dossier claiming that the activities of foreign-funded NGOs had cut India’s growth rate have sparked fears that Narendra Modi, the nationalistic new prime minister, will tighten the rules further.” It did however note that these restrictions “sit alongside a thriving civil society”.

In the second half of 2015, the Indian government cancelled registrations of more than 10,117 NGOs across the country.

The union government alleged that due to not filing of annual returns for the financial years 2009-2010, 2010-11 and 2011-12, the government had cancelled the registration of these NGOs in 2015. Most number of registrations were cancelled from state of Andhra Pradesh (1,420), followed by Uttar Pradesh (1,147) and Tamil Nadu (10,068).

The most prominent of the cancellations was Greenpeace, an organisation that campaigns to protect the environment, whose licence was cancelled by the Ministry of Home Affairs (MHA) on September 3, 2015.

Following the clampdown on NGOs, the global charity the Ford Foundation, which is based in America, froze $4 million of funding to India. The US Ambassador to India Richard Verma said that the tougher approach may have a “chilling effect” on civil society and democratic traditions.

The Ford Foundation has donated more than $500 million to India since opening its first overseas office in Delhi in 1952. It has also funded a number of NGOs and institutions across the country, including Bengaluru-based National Law School of India University (NLSIU) and Centre for Internet and Society.

Executive director of Centre for Internet and Society (CIS), Sunil Abraham, explained that unconventional intuitions — which work in fields other than health, education and social security — like CIS are mostly funded by foreign philanthropy entities. “Foreign funding cut on NGOs is a step to restrain institutions from debating and questioning government policies,” said Abraham.

An Indian Express report from this time stated that the National Democratic Alliance government had proposed a series of amendments to the Foreign Contribution Regulation Act (FCRA) in order to strengthen its scrutiny of financial transactions involving NGOs. The most important change was that government would equate “economic security” for NGOs under the FCRA with the definition provided in Section 2 of the Unlawful Activities Prevention Act (UAPA).

An analysis of data for the past eight years shows that the number of organisations receiving foreign funding is on decline. In 2006-07, the total number of NGOs that received foreign funding was 22,261. By 2014-15, the number had declined to 12,014 across the country.

However, in terms of amounts, there has been an overall increase in funding. In the fiscal year of 2006-07, foreign contributions to NGOs in India amounted to Rs 11, 260 crore, which went up to Rs 13,115 crore by 2013-14.

Both the amount of funding received and the number of NGOs have no schematic patterns that establish how funding went down or that NGO registrations were revoked during any particular government until 2014-15, but the considerable decline in funding for NGOs since 2014-15 has raised concern.

In the last nine years, Delhi (Rs 20,033 crore) received the highest foreign funding, followed by Tamil Nadu (Rs 15,589 crore), Karnataka (Rs 10,110 crore) and Maharashtra (Rs 9,952 crore). This figure clearly shows that funding for NGOs has nothing to do with political parties, as the above states have been governed by different governments at different time periods.

However, the data does suggest that states run by BJP have fewer NGO registrations compared to NGO registrations in non-BJP ruled states. Barring Maharashtra, BJP-ruled states such as Madhya Pradesh, Chhattisgarh and Gujarat have small numbers of registered NGOs in comparison to those ruled by either Congress or regional parties. Tamil Nadu, Andhra Pradesh, Uttar Pradesh and Karnataka have more registered NGOs.

And among them Tamil Nadu with 4,938 has the highest number of registered NGOs. In Tamil Nadu, during the Dravida Munnetra Kazhagam reign from 2006-2011, foreign funding to NGOs declined drastically, rising again after 2012-13, only to decline substantially in 2014-15.

Fearing harassment, most of the NGOs contacted declined to comment on the reduced funding.  And those who did speak sought anonymity.

A director of a Mumbai-based educational welfare society, working in the field of education said, “I didn’t understand the reason for reducing our foreign funding. We were receiving foreign funding for the last four years, but received the least in 2014-15, over 32% less than from the previous year.” The society received Rs 8 crore as foreign funding in 2012-13, which was cut down to Rs 5 crore in 2014-15.

A senior member of the Yesuraja Trust in Dharmapuri, which works in the fields of health and education in Tamil Nadu, at first declined to comment but later declared, “We’re a private entity and not an NGO.” The FCRA website reveal that the trust has zero funding in financial year in 2013-14 and 2014-15.

The unprecedented crackdown was not peculiar to India alone. Human rights  organisations have been facing restrictions in a number of countries, which have passed or were in the process of passing laws to curtail NGO activities. A Guardian report stated that over the past three years, more than 60 countries have passed or drafted laws that curtail the activity of non-governmental and civil society organisations. India is on this list along with countries like China, Russia and Egypt. It’s not a particularly august list of which to be part.

James Savage of Amnesty International said, “This global wave of restrictions has rapidity and breadth to its spread we’ve not seen before, that arguably represents a seismic shift and closing down of human rights space not seen in a generation.” Onno Ruhl, country director for World Bank, India, agreed with Savage and said to Indian Express, “NGOs are quite inconvenient at times. But I would still rather have an inconvenient NGO than people not having the right to speak.”

The serious question that these numbers raise is the effect that the reduced foreign funding will have on philanthropic work and social welfare in India. NGOs have a long history of being development partners of the state and the government’s decision to restrict their finances could have a serious impact upon the work done as well as increase their dependence upon the state. Is that what the country needs?