Nearly 6,000 NGOs Lose FCRA Licence: What Does it Mean? Why is it Important?

The list of organisations whose FCRA registration has lapsed include Jamia Milia Isamia, Oxfam India, and even IMA.

For nearly 6,000 Non-Governmental Organisations (NGO)s across the country, 2022 began with terrible news: their Foreign Contribution (Regulation) Act (FCRA) registrations had lapsed. This meant foreign funds, necessary for day-to-day work and charitable endeavours, had either been snipped off or locked out of reach.

Before Saturday, 1 January, 22,762 NGOs were registered under the FCRA, as per news agency PTI. The website of the Ministry of Home Affairs (MHA) shows that the number has now come drastically down to 16,829.

On 1 January, 5,933 names were added to the MHA's list of NGOs whose registration was "deemed to have ceased."

The list of organisations whose FCRA registration has lapsed include Jamia Milia Isamia, Oxfam India, and even Indian Medical Association (IMA). This announcement comes only a few days after the MHA refused to renew the FCRA licence of Mother Teresa's Missionaries of Charity.

But what is FCRA registration and why is it important?

What is FCRA Registration and Who Can Register?

The Foreign Contribution Regulation Act (FCRA) was originally enacted in 1976 to regulate the inflow of money from abroad into the country. In 2010, the old law was repealed and a new FCRA was enacted.

Under the FCRA, there are certain categories of persons who cannot receive foreign contributions (including cash donations and even gifts of a certain value) under any circumstances: election candidates, the editors or publisher of newspapers, judges, public servants, members of Parliament and state legislatures, and even political parties.

However, in 2017, a retrospective exemption was created for donations received by political parties through Indian subsidiaries of foreign companies (which were supposed to be prohibited as well). This protected the BJP and Congress from falling foul of the law because of the donations they had received from Vedanta.

Organisations which do charitable work can receive foreign contributions if they register with the government or obtain prior permission for receipt of foreign funds.

Why is an FCRA Registration Important?

FCRA registration is necessary for the acceptance and utilisation of foreign contributions. In fact, it is mandatory for all associations, groups, and NGOs, which intend to receive foreign donations, to register themselves under the FCRA.

If granted, an FCRA registration lasts for five years, and can be renewed at the end of it. In such cases, there is no need for the organisation to apply for a fresh registration each time the period ends, as a simple renewal will suffice.

If the licence lapses or is revoked, not only will the organisation be compelled to abstain from receiving foreign funds in the future, but they will also have to relinquish access to the funds already received from foreign sources.

For instance, as per a report by The Hindu: Oxfam India — an organisation that works for economic and gender justice among Adivasis, Dalits and Muslims — stands to lose access to over ₹62 crore in its designated bank account. Some of the organisation’s biggest donors are Oxfam, Australia, Oxfam, Germany, Oxfam, Great Britain, and Stichting Oxfam International, Netherlands.

Most NGOs rely heavily on foreign funds to conduct their welfare and charity-related activities among the less-privilege, marginalised, or otherwise vulnerable populations of the country. Thus, an FCRA registration is of paramount consequence for them to continue to do so.

So, What Happened With Nearly 6,000 NGOS?

Media reports have quoted MHA officials as stating that the ministry declined to renew the FCRA registration of 179 NGOs. Further, as per the reports, 5,789 others did not apply for a renewal before the 31-December deadline.

“As many as 5,789 associations did not apply for renewal of their certificates despite numerous reminders. Of the applications received, 179 were refused renewal after a scrutiny by the MHA found them ineligible to receive foreign funds.”

MHA official, according to The Hindu

Meanwhile, the MHA official has claimed they are “processing the request of other NGOs who have applied, and due to the pendency, an extension was given till March.”

But there were also a slew of reasons that may have kept a multitude of NGOs from completing the renewal process.

These include the 2020's amendments to the Act, which prohibited those who have an FCRA registration from transferring foreign-sourced funds to any other persons/organisations, as well as made it mandatory for every FCRA-registered organisation to have a specific FCRA account at a State Bank of India branch in Delhi for receiving their funds.

Another hurdle to the process may have been the coronavirus pandemic and its impact on commutation, communication, healthcare, the general pace of bureaucratic activities, and the other logistical and practical challenges it posed.

Besides, since coming to power in 2014, the Modi government has cancelled the FCRA registrations of many NGOs, including Greenpeace and Amnesty International.

What Now? What Next?

When it comes to registrations and renewals, much of the process is unwritten, people who work on these matters explained to The Quint.

The process for both takes a long time, and applicants try to work with the MHA and other ministries to ensure that their applications are accepted and any issues resolved.

The refusal to renew a registration is different from a cancellation or even a suspension of an FCRA registration, as it does not require a violation of the FCRA. Unlike refusal of registration or cancellation of licence, there is also no specific appeal process under the FCRA.

However, since the government is supposed to provide reasons for this, it does mean that it is possible to file a writ petition in a court of law against this decision – though experts advise that this is unlikely to help unless there has been some gross misapplication of the law by the government.

The most logical option is, therefore, likely to be to just file a fresh application for FCRA registration. Although perception-wise a refusal to renew is considered as bad as a cancellation, the consequences are not quite as serious.

If an FCRA registration is cancelled, then the person/organisation cannot make an application for a fresh registration for three years. If a renewal request is rejected, there is no such cooling-off period.

The documentation required for a fresh application by MoC is essentially the same as what they would have had to file for their renewal request, so provided any necessary amendments or corrections are made (if possible), this should not require any particularly onerous additional work. However, the process is likely to take time. Further, there is no guarantee that every organisation’s application would succeed.

In the meantime, however, the organisation can attempt to receive foreign contributions by applying for prior permission. But this permission is not blanket: it is granted for specific amount from specific donors for specific purposes, and on meeting specific conditions such as registration under fixed statutes and a letter of commitment from the foreign donor.

'No Good Deed Ever Goes Unpunished': Here's How Others Reacted

Oxfam India on Sunday, 2 January, said that the decision to refuse the renewal of the licence would hurt its funding from abroad, which it needed to continue humanitarian and social work in 16 states.

"We have been working in public interest with the government, communities, and frontline workers for decades. This decision by the MHA will severely hamper these collaborations, through which we were providing relief to those who needed it the most during times of crisis."

Oxfam India

Meanwhile Dhaval Udani, founder of DanaMojo, an online payment platform for NGOs, told The Hindu, that this “also does not seem to be a case where the NGOs were informed earlier and site updated now."

“30% of the NGOs removed in one shot. No reason given,” Udani said.

Others have taken to Twitter to lament this loss for NGOs, stating ‘no good deed ever goes unpunished’ and to point out that resorting to corporate funds (in absence of international contributions) means ‘hands tied’.

(With inputs from PTI, The Hindu and The Indian Express.)