Foreign funding and regulations

Many organisations that accept foreign funding are functioning in India. These institutions often claim that the funds are meant for charitable activities. Such NGOs that receive foreign contributions are required to strictly follow the provisions of the Foreign Contribution Regulation Act (FCRA). The central government has the authority to cancel the licenses of organisations that violate these rules. According to the law, funds received from abroad must not be used for anti-national activities, personal gain, corruption, or purposes other than those for which they were intended. Organisations belonging to all religious communities in India receive foreign funding, and such groups exist in Kerala as well. There have been allegations that some of these organisations misuse the funds to purchase estates, urban properties, and other assets instead of using them for their intended purposes.

It has also been found that certain organisations receiving foreign funds have used this money for activities against national interests. The central government has cancelled the licenses of such organisations. Those who provide funds from abroad may have various objectives. It is often a common practice for such funding agencies to carry out certain activities indirectly- through the organisations that receive their funds- especially things they may not be able to do directly. If such activities are allowed without proper control, it could pose a threat to the country’s internal security. Therefore, there is no point in criticising the strict regulation of foreign funding. In 2018, during the Kerala floods, the UAE had offered Rs 700 crore and Qatar Rs 35 crore as aid, but India declined these offers.

India’s policy of refusing foreign government aid for disaster management and rehabilitation developed as part of its growth strategy. This policy was first implemented by then Prime Minister Manmohan Singh after the 2004 Indian Ocean tsunami. Before that, India had accepted foreign assistance during disasters such as the Uttarkashi earthquake (1991), Latur earthquake (1993), and the Bengal cyclone (2002). However, this policy applies only to foreign governments and not to individuals or charitable organisations. Assistance from Non-Resident Indians (NRIs) and foreign NGOs can still be accepted by organisations in India that hold valid FCRA licenses.

During natural disasters and similar situations, large amounts of funds are received, and it is important to ensure that NGOs use these funds only for their intended purposes. The central government is considering strengthening the FCRA to enhance regulation over licensed organisations. As part of this, the government is preparing to introduce amendments that would allow the assets of organisations whose FCRA licenses are cancelled to come under central government control. The Union Cabinet has approved the bill, and it is expected that Union Home Minister Amit Shah will introduce it in the current session of Parliament. Strengthening the law is necessary to ensure that contributions harmful to national security and national interests do not enter the country.