On behalf of the Voluntary Action Network India (VANI) and its member organisations, Harsh Jaitli, Chief Executive Officer, VANI, has written a letter to the Ministry of Home Affairs (MHA) with suggestions on the proposed amendments to Foreign Contribution (Regulation) Rules (FCRR), 2011. Excerpts from the letter, followed by suggestions by VANI:
This letter is in reference to the circular (F.No II/21022/23 (52)/ 2014 – FCRA – III) issued by Foreign Contribution Regulation Act (FCRA) division on the proposed amendments to Foreign Contribution (Regulation) Rules (FCRR), 2011 on June 17, 2015. VANI is an apex body of voluntary organisations in India and it was formed with an aim to promote voluntarism and strengthen the voluntary sector in India in 1988. We have around 500 voluntary organisations as our members and a strong base of around 10,000 development organisations spread out in 29 states of India. Our members include networks, research, grass root implementing organisations and community based organisations.
Based on its interactions and feedback from its members, associates and experts, VANI would like to propose various suggestions. While proposing these suggestions, views of various development organisations have been considered. In order to generate a healthy debate on the proposed amendments and gather collective inputs of the civil society, VANI also conducted a meeting of key development organisations at VANI office on 30th June, 2015. We had also invited Joint Secretary (Foreigner), Ministry of Home Affairs for this meeting but due to some reasons there was no representation from the ministry.
As you are aware about the diversity of the sector which also includes many religious organisations, corporate foundations, hospitals, schools and universities etc. registered under the FCRA. However, here VANI has provided the inputs based on comments from development organisations only and not the other wide spectra of institutions receiving the grant. We have also raised issues related to the smaller grassroots organisations as they operate in remote areas with limited access to internet but their role in nation development cannot be neglected. The proposed amendments remain oblivious to the fact that organisations working in rural areas do not have easy access to internet access like the ones operating in metro cities. We have also tried to include their inputs for consideration by the ministry.
We hope that the ministry will consider our suggestions as a large spectrum of development organisations working in rural, semi urban and urban areas will be affected by the implementation of such biased and regressive rules. We also request that the foreigners division, MHA should organise a dialogue with the sector before these rules are amended in haste. VANI will be happy to facilitate this dialogue.
During the meeting with key organisations in Delhi as well as feedback from experts and other organisations three follow-up steps are being suggested:
- VANI will provide all support to MHA for building capacity of voluntary organisations as well as regular input for smooth compliance. As we all understand shifting online reporting is the quantum jump from the existing system. Majority of the voluntary organisations have expressed their desire to abide by the instructions of the ministry but we also request full support from the MHA in creating enabling environment for the same.
- We also feel that many major donor organisations are put under Prior Approval Category by the MHA in recent months. I am sure that Ministry is also of the opinion that not all projects supported by these donors are disagreed by the Ministry. Hence, to facilitate the smooth implementation of such socially useful projects, VANI would like to interact with the Ministry to develop guidelines or system where it becomes less painful and well-coordinated with Banks.
- Last but not least is the efficacy of the FCRR and FCRA in last five years. As discussed during my last meeting with Joint Secretary (Foreigners), VANI is undertaking the review of the FCRR and FCRA. We would be providing some concrete suggestions to the Ministry for making FCRA more effective and manageable keeping in mind the spirit of the law.
I would also like to mention here that to discuss the issues further in details, VANI is organising a meeting on July 23, 2015 in Delhi. We will send you a separate invitation in day or two and would like to have presence of representative of the Ministry to further discuss issue with the key organisations.
Meeting held on Proposed Amendments to FCRR, 2011 at VANI office on June 30, 2015: Major suggestions
Regarding the online systems:
- Efficient online system of Ministry of Home Affairs (MHA) for reporting on FCRA: In the first place, the electronic systems, as proposed by MHA, need to be efficient and manageable as the key participant organisations raised grievances related to online filing of returns and loss of passwords. In case of loss of passwords or login id’s, there is a lack of clarity on the procedures to procure it. It was raised that even after requesting for application they have not been able to procure their new passwords.This needs to be clarified by the MHA.
- Concerns of small grassroots organisations to function electronically: Smaller grassroots organisations do not have online access and many a times face such difficulty due to poor internet connections. Even procuring digitally signed organisations is beyond the capacity of smaller grassroots organisations. The only online provision will be extremely difficult for the smaller grassroots organisations who play a huge role in nation development.
- Organisations working in conflict areas: It was also raised that putting information related to funds on the website will be difficult for the organisations who operate in conflict and Naxal prone areas and where law and order is an issue due to display of real time financial data on their websites. The internal security of such organisations may come under threat due to cyber-crimes.
- MHA must have a database of organisations with their complete details: It was suggested that the ministry should develop a database of organisations with all their documents and details in one place, rather than procuring the same information again and again after every five years during the renewal process.
Social space for the Individuals running the organisations and advocacy based organisations:
- Seeking details of Facebook, Twitter not acceptable: All the participant organisations shared the common concern that seeking such details entails restricting the social space of individuals which amounts to curtailment of fundamental right of the citizens of this country.
- Clarity on MHA’s interpretation of various words under the proposed amendments: In the current amendments, the details of Chief Patron have been sought which is an addition. It would be better for the sector to understand the definition and interpretation of MHA on the chief patron. Also certain words like national security need clarity and MHA’s interpretation for organisations to comply with the Act.
- Surprise visits by local IB, police must be immediately stopped after implementation of the FCR rules: Most organisations raised that even after complying with the law and rules, organisations have to be the victim of local IB and police who often visit uninformed and most often do not share their purpose and identity proofs. As the current law is an attempt to enhance transparency and accountability from the sector, such visits must be immediately stopped.
Communication process between MHA, Banks and foreign contribution (FC) recipient organisations:
- Reporting of Banks to MHA: Many organisations in rural areas have experienced non-cooperation from banks to open FC account due to various obligations for banks. Now if banks are asked to submit details of fund receipt by non-registered NGO within 48 hours the banks might refuse to open FC bank account. The earlier 30 days was quite reasonable. It is in the benefit of the sector and to increase the transparency and accountability of the sector including others that a copy of the banks intimation on FC money to MHA should also be received by the FC recipient organisation. It was also raised by some that due to extreme pressure on banks for speedy reporting, there will an increased fear among banks to open the FCRA accounts and in many cases they might deny opening the accounts.
- Grievance Redressal Mechanism: There was a common consensus that just a meeting on every fifth of the month (as per the order passed by the MHA) is not sufficient, looking at the volume of the sector, their grievances and geographical spread. It was suggested that an appropriate grievance redressal mechanism should be in place to look into the matters of the sector. Since there has been a long communication gap between the MHA and the sector, this is also seen as a window for enhanced communication and speedy redressal of issues. E.g. In income tax, there is an appellate authority to look into the matters.
- Capacity building of NGO’s on the new rules and Act: t was raised by most of the participants that there has been a gap in capacities of the NGO’s to comply with FCRA. The ministry this time should conduct regular outreach programmes for enhancing compliance of NGO’s with the law through Financial Action Task Force (FATF).
- E-mail/SMS notifications on new orders and amendments: It was suggested that there should be a regular update to NGOs on any new orders passed and proposed changes through a SMS/e-mail service.
- Translation in Hindi and other main languages: Since majority or organisations are grassroots and understand Hindi or other vernacular languages, it will be in the benefit of both MHA and organisations to pass orders in different key languages to enhance outreach and elicit maximum responses/ debates.
For section-wise proposals by VANI on amendments to FCRR, click HERE