Skip to main content

On FCRA....continued...


In continuation with the earlier post on FDI and FCRA, this is another one on Government's discreet versus discrete ambivalence. 

Civil Society in the world’s largest democracy is vibrant and has been actively involved in addressing many of the ills that have plagued the country hitherto. This has also lent them credibility as contributing to nation building by partnering government in implementing various schemes and welfare measures. Civil Society Organizations receive support for carrying out their activities from their membership status, government, corporate houses, individual donations and family wealth, national and international foundations. If one were to compare the difference between the amounts of funds coming in for ‘for-profit sector’ with for ‘non-profit sector’, then it is hardly any different from carrying out an exercise in absurdity, for ‘such’ vast a gulf exists. Government of India has made various mandatory provisions under registration clauses for such organizations that generally go under the name of regulatory norms. These regulations hold Civil Society Organizations accountable for contributing to income tax, seeking permission to have a non-profit status, to name a few. 


Foreign Contribution Act, 1976  (Caution: pdf file) was one such regulatory mechanism, which was subsequently replaced by Foreign Contribution Regulatory Act (FCRA) in 2010 (Caution: pdf file). The FCRA Rules under the Act became a reality in 2011, which possessed certain provisions that called for constraining the democratic space these organizations had full rights to. What is being alluded to here is Section 3, which impinges upon dissenting voices, which are so very crucial for the healthy functioning of democracy. The Section was even objected to be certain parliamentarians who called it an infringement mechanism on constitutional rights like ‘freedom of association’ and ‘freedom of expression’. That, such provisions in the Act and Rules left ample room for manipulation and misuse was the common apprehension. These apprehensions were duly realized, when cases after cases of FCRA suspension of Civil society Organizations started multiplying over the last two years. The common rationale for such suspensions was Civil Society showing solidarity with actions pertaining to people’s causes, thus behaving like political actors and violating Section 5 of the FCRA Rules, 2011. The Section puts down any politically motivated endorsement by Civil Society Organizations at the discretion of Central Government to decide on its continuing to draw financial support from foreign contributors. So, unless a non-profit organization accepts to play a puppet, the government could manipulate and misappropriate facts to its suitability. 

What is ironical here is the distinction drawn by the Government, especially since the early 1990s between ‘for profit sector’ and ‘for non-profit sector’, whereby the regulatory mechanism for the former pertains to Foreign Exchange Regulation Act (FERA), 1974 translated into Foreign Exchange Management Act (FEMA), 1999, while for the latter, Rules get introduced making regulations more stringent and discrete. Moreover, FCRA 2010 and FCRA Rules 2011 are often shrouded in suspicion for being anti-people, and hence are governed by the Ministry of Home Affairs, thus breaching the ‘Equality Before Law’ principle. If parliamentary democracy is devoid of associations that question, dissent that is correctional in nature, and accountability that is empowering the political and social ethos of its citizens, then such participatory democracy is soulless, and swims against the tide of constitution-enabled rights. As a functioning democracy, we need accountability on all fronts and at all levels, not selective applications of laws, primarily with the purpose of stifling dissent and democratic rights to form associations and work for people's cause, Section 3 (1) (f) of FCRA 2010 and Rule 3 of FCRA Rules 2011 precisely do that. And, for a healthier spirited democratic values and respect for its citizens, all suspensions of Civil Society Organizations aided under FCRA be revoked, and suitable changes be made at the earliest in Section 3 and 5 of FCRA Rules 2011 to rid of any ambiguity.

Comments

Popular posts from this blog

GST – Impact on Small Industry and the Informal Sector

The Goods and Services Tax (GST), that came into effect on 1st July, 2017, has been lauded as the most comprehensive contemporary reform of Indian indirect taxation. Aimed at creating a common, unified and integrated domestic market, allowing the free flow of goods and services across state lines, GST is supposed to deliver Indian industry and thereby the economy the competitive edge apparently lacking till now.
Reality is however a far cry from the picture painted by government. GST by creating platform a conducive to economies of scale and nullifying regional tariffs, is both conceptually and practically advantageous to big business and detrimental to the informal sector and small businesses.
These groupings, informal and small, though quite different have some degree of overlap. Informal business is overwhelmingly small but not all small businesses are informal. GST’s impact on these groups is quite different both with regard to extent of impact or in terms of results sought.
Small Bu…

Debt versus Equity Financing. Why the Difference matters?

There is a lot of confusion between debt and equity financing, though there is a clear line of demarcation as such. Whats even more sorry as a state of affair is these jargons being used pretty platitudinously, and this post tries to recover from any such usage now bordering on the colloquial, especially on the activists’s side of the camp. What is Debt Financing? Debt financing is a means of raising funds to generate working capital that is used to pay for projects or endeavors that the issuer of the debt wishes to undertake. The issuer may choose to issue bonds, promissory notes or other debt instruments as a means of financing the debt associated with the project. In return for purchasing the notes or bonds, the investor is provided with some type of return above and beyond the original amount of purchase. Debt financing is very different from equity financing. With equity financing, revenue is generated by issuing shares of stock at a public offering. The shares remain active from th…

Data Governance, FinTech, #Blockchain and Audits

Data Governance and Audit Trail Data Governance specifies the framework for decision rights and accountabilities encouraging desirable behavior in data usage Main aim of Data Governance is to ensure that data asset are overseen in a cohesive and consistent enterprise-wide manner Why is there a need for Data governance?  Evolving regulatory mechanisms and requirements Could integrity of data be trusted? Centralized versus decentralized documentation as regards use, hermeneutics and meaning of data Multiplicity of data silos with exponentially rising data Architecture Information Owner: approving power towards internal + external data transfers + business plans prioritizing data integrity and data governance Data steward: create/maintain/define data access, data mapping and data aggregation rules Application steward: maintain application inventory, validating testing of outbound data and assist master data management Analytics steward: maintain a solutions inventory, reduce redundant solu…