No SC relief for NGOs on foreign funding licences: What happened, why they are important

The apex court, hearing a plea filed by Texas-based Global Peace Initiative, said that the NGOs should approach the government on the issue

FP Staff January 25, 2022 16:22:32 IST
No SC relief for NGOs on foreign funding licences: What happened, why they are important

File image of Supreme Court in New Delhi. PTI

The Supreme Court has delivered a blow to over 6,000 NGOs after it refused to grant interim relief on a plea challenging the government's refusal to renew their Foreign Contribution (Regulation) Act licences which is needed to receive funding from abroad.

A bench headed by Justice AM Khanwilkar asked these NGOs to make representation to the Central government which would take a decision as per law.

In layman’s terms, the Supreme Court said the NGOs should first approach the government. The matter could be moved before the court if NGOs are unhappy with the decision.

The order came on a plea filed by Global Peace Initiative, an organisation based in Texas, USA, and Dr KA Paul, founder of the organisation, sought direction from the Centre to extend the validity of registration of those organisations that had failed to apply for a renewal of registration, till such time as COVID-19 continues to be a 'notified disaster'.

According to a LiveLaw report, Solicitor-General Tushar Mehta, on the basis of instructions from Ministry of Home Affairs, told the bench the FCRA licences of 11,594 NGOs which applied for renewal within the cut-off date have been extended.

Moreover, Mehta questioned the standing of the petitioner, saying that a "Houston based association should not be concerned with this". "I don't know what the purpose of this PIL is. Something is amiss," the SG was quoted as saying by LiveLaw.

According to officials, the FCRA licences of 18,778 organisations were slated to expire between 29 September, 2020, and 31 December, 2021. While as many as 12,989 organisations applied for renewal during this period, others had not. And so, the total number of FCRA-registered organisations had dropped sharply from 22,762 on 31 December, 2021, to 16,829 on 1 January.

As per a submission by Mehta, the FCRA licences of 11,594 NGOs that had applied for renewal on time have since been extended. Aside from these numbers, the renewal applications of 179 organisations were also rejected by the home ministry due to different reasons.

Let's briefly examine FCRA licences and why they are important:

What are FCRA licences?

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.

According to the new FCRA, certain individuals such as editors and publishers of newspapers, judges, public servants, members of Parliament and political parties cannot receive foreign contributions. However, one must note that in 2017, an exemption was created for donations received by political parties through Indian subsidiaries.

NGOs can receive foreign contributions if they register with the government or obtain prior permission for receipt of foreign funds.

Why is FCRA licence important?

The most important function of an FCRA licence is that it permits an organisation to receive foreign donations. If they don't have such a licence, they can't even use already received donations from abroad. All existing and future scope of utilising foreign funding stands frozen in the absence of an operational licence.

For instance, according to a report in The Hindu, Oxfam India stands to lose access to over Rs 62 crore in its designated bank account as its licence was not renewed.

One must understand that many NGOs rely heavily on foreign funds to conduct their activities and thus, an FCRA registration is of utmost importance for their work to continue.

Around 6,000 NGOs lose their licence

The entire issue of FCRA licences gained prominence in the beginning of January when it was reported that registration of 5,933 NGOs under the Foreign Contribution Regulation Act (FCRA) had lapsed on 31 December, 2021, either for failure to apply for renewal before the due date or the Ministry of Home Affairs (MHA) rejecting their applications.

Oxfam India Trust and Jamia Milia Trust along with Indian Medical Association were some that have lost their FCRA licence.

Missionaries of Charity, the charity set up by Nobel laureate Mother Teresa to help the poor and destitute, also had faced trouble in this matter. On 27 December 2021, the home ministry had said that it cancelled the FCRA licence of Missionaries of Charity after receiving some "adverse inputs".

However, on 8 January, the ministry restored the FCRA registration of the Missionaries of Charity.

With inputs from agencies

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