Crackdown on Civil Society and NGOs in India

What’s in today’s article?

• Why in News?
• What are Civil Society Organisations (CSOs)?
• CSOs in India
• Challenges Faced by CSOs in India
• Crackdown on CSOs in India
• Allegation Against Some of the NGOs Working in India

Why in News?

• Following the searches, the Income Tax (I-T) department recently concluded that some of the NGOs had allegedly violated provisions of the Foreign Contribution Regulation Act (FCRA) 2010, cancelling their FCRA licences.
• This relates to the “mismatch” in annual returns and statements of foreign currency bank accounts and “misutilisation” of funds in foreign currency.

What are Civil Society Organisations (CSOs)?

• Definition:
  • A civil society is described as a group of like-minded people who manage and plan activities for the betterment of the community, which requires a formal set up for implementing those plans and activities.
  • In India, CSOs are defined as all nonprofit organisations independent from the government and the market that operate around common interests, purposes, and values.
• Types of CSOs: NGOs, CBOs, etc.
  • Non-government Organisations (NGOs):
    • CSOs are mostly synonymous with NGOs, which are professional organisations that are privately run, not for profit, self-governing, and voluntary.
    • They register with the government but work independently. They serve the communities that they target and operate at different levels, from local grassroots to national and international.
    • They work across a range of issues such as sanitation, housing, women’s empowerment, mental health, etc.
  • Community-based organisations (CBOs): CBOs are voluntary, bottom-up, grassroots organisations located in specific communities that cater to the local needs of the areas that they work in.
    • Their members are also beneficiaries of the work.
• Role of civil society: They act as an intermediary between citizens and the state by representing the voices of the poor and vulnerable groups, articulating their needs, and facilitating change with and for them.
• Nature of work: Support service delivery, helps in drafting policy action plans and legislation, research and evidence, and developing and scaling innovative models of change.

CSOs in India:

• Statistics on CSOs:

• There is a paucity of data on civil society in India.
• In 2015, after an order from the Supreme Court, the Central Bureau of Investigation (CBI) mapped all the registered NGOs in India.
• Their report in 2015–2016 disclosed 3.1 million registered NGOs in the country.
• Legal and regulatory framework:
  • The laws govern three aspects of CSOs’ existence: registration, taxation, and regulatory compliance.
  • Registration: Governed by the Societies Registration Act 1860, the Trusts Act 1882, the Section 8 of the Companies Act 2013.
  • The FCRA 2010:
    • It is applicable to all such non-profit organisations (NPOs), which accept foreign contributions for their work.
    • The goal is to increase the transparency and accountability of NPOs.
    • Under it, these organisations must
      • Mandatorily register with the central government,
      • Accept these payments through the list of designated banks by the government, and
      • Maintain separate books of accounts for these funds.
    • Furthermore, the registration for foreign contributions must be renewed every 5 years.
• Activism or impact of CSOs:
  • The strongest area of CSOs is their grassroots presence, where they are best equipped to reach the remotest areas and sections of the country.
  • Their ability and experience to reach out to the most vulnerable groups are extremely valued, especially when formal institutions may fail to do so.
  • For example, they have played a significant role in mitigating the impact of COVID-19 in India by providing -
    • More direct support (delivery of essential items) to the affected population and
    • Indirect support to institutions working on recovery to strengthen their provisions and channels for the affected groups.

Challenges Faced by CSOs in India:

• CSOs in India face multiple challenges. These include -
  • Transparency and legitimacy with respect to the level of information expected of them and
  • The degree of scrutiny that they are subject to, specifically around funding.
• Given that a high portion of financial sources are external grants and donations, this increases the dependency of organisations and often questions their sustainability.
• Many grants by the government and international donors are tied to specific projects, making it difficult for CSOs to focus on their core long-term functions.
• More competition within civil society has brought a greater diversity of groups, it has led to a decline in the share of resources allocated to them.

Crackdown on CSOs in India:

• For hurting economic interests:
  • A number of notable organisations working on environmental and social issues have faced scrutiny by India’s investigative agencies for hurting the country’s “economic interests” or “stalling” development projects.
  • For example, the FCRA licence of one of India’s oldest think tanks, the Centre for Policy Research (CPR), was cancelled recently following a year of suspension and raids from the I-T Department.
• As a result of shrinking public participation:
  • Public consultations are a necessary component of the environmental clearance process for large infrastructure development projects.
  • Projects perceived as being of national importance or for national security – such as roads – have been made exempt from certain compliance regulations.
  • The crackdown on civil society organisations comes as public participation in environmental clearance norms is facing a setback.

Allegation Against Some of the NGOs Working in India:

• Oxfam India:
  • There are allegations of activities against stated objectives. For instance, Oxfam India’s support for Oxfam Australia’s push to stop mining by Adani Group in Australia.
  • After its FCRA licence was cancelled, Oxfam tried to locate other “puppet NGOs” with valid permissions to redirect funds for causes.
• CPR:
  • The I-T Department claims that the CPR was allegedly involved in the Hasdeo movement against coal mining in Chhattisgarh.
  • According to the I-T department, CPR received foreign funds of Rs 10.19 crore since 2016 for its Namati-Environmental Justice Programme to file “litigation and complaints”.
  • Environics Trust: The I-T Department alleges funding for protests against JSW Utkal Steel Plant in Odisha’s Dhinkia and that Rs 1,250 each was transferred to accounts of 711 local residents in 2020.
  • LIFE: LIFE Trust is being used as an instrument by (US-based NGO) Earth Justice to stall the coal mines and Thermal Power Projects.
• Working in concert:
  • According to the I-T department, there are alleged linkages between the NGOs, which indicate that they were working in concert with each other:
  • For example, Oxfam India funded ET to mobilise communities with the help of local unions against coal industries.
  • However, according to these NGOs the allegation that all the NGOs were interlinked and interconnected is baseless.

Q.1. What are Self Help Groups (SHGs)?

A SHG is a community-based group (usually women from similar social and economic backgrounds) with 10-25 members, all voluntarily coming together to save small sums of money, on a regular basis. They pool their resources to become financially stable.

Q.2. What is the purpose of the Companies Act 2013?

The Companies Act 2013 has been enacted to improve corporate governance in India and thus promote the economic development and welfare of the country by making it easier for Indian companies to start and operate their businesses.

Source: Tax crackdown draws links between NGOs — in ‘cause’ and funding pattern | ADB