"Devastating Consequences": Centre On Unregulated Foreign Funds For NGOs

The centre has defended its move to amend a law on foreign funding for non-profits over concerns that most of the money that comes for development work is often diverted to train Maoists. During a Supreme Court hearing on a challenge against the amended Foreign Contribution (Regulation) Act or FCRA, the government said the changes in this law would ensure funds that came from abroad to non-profits are used for their publicly stated and intended purpose, and not spent on other uses that could harm the country.

"Foreign contributions, if unregulated, can cause devastating consequences to the sovereignty of the nation. We need to regulate foreign funds. There may be money coming in for Maoist activity or to destabilise the country," the government's lawyer Solicitor General Tushar Mehta said. "Intelligence Bureau has reported that quite often, money coming for development work is used to train Maoists," the government told a Supreme Court bench of Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar.

The petitioners Noel Harper and Jeevan Jyothi Charitable Trust countered the government with an example from the COVID-19 pandemic, that "half of the administration that has happened in the country during Covid is through NGOs." They said any assumption that all non-profits are criminals and work against sovereignty and integrity of the nation is wrong.

The Supreme Court said the centre should ensure foreign funds are not misused by NGOs. "Funds should be used only for the purpose for which they have been received. Otherwise FCRA's purpose is not solved," the Supreme Court said and reserved its judgment.

The petitions by Mr Harper and Jeevan Jyothi Charitable Trust have challenged the FCRA amendments over what they claimed were imposition of harsh and excessive restrictions on non-profits that use foreign funds.

Another petition filed by Vinay Vinayak Joshi challenged the extension of time allowed by the Home Ministry to NGOs to comply with the new FCRA conditions.

Lawyer Gopal Sankaranarayanan, who represented Noel Harper and Jeevan Jyothi Charitable Trust, questioned the amendment that requires funds to be transferred only to State Bank of India's main branch in Delhi. "For example, the NGO Pratham that is involved in child education funds projects in several remote parts of the country and they cannot do it now anymore under the amendment. The presumption cannot be that everyone is criminal and somehow most of them are against sovereignty and integrity," Mr Sankaranarayanan said.

The centre had earlier told the Supreme Court that there is no question of fundamental rights being violated through control of acceptance of foreign contribution by certain type of organisations because these organisations or individuals are always open to operating with local funds and achieving their objectives.

Some of the non-profits that have seen friction with the government includes Greenpeace and Amnesty India, who claimed the government's move has dried up their funding sources.