The Indian Government’s Attack on Nonprofits

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New Orleans     In recent weeks the conservative, communalist Indian government led by Prime Minister Narendra Modi has taken steps yet again to attack nonprofits, especially those with any extensive ties to foreign donors.  Technically, these were changes in the law for those organizations registered under the FCRA, the Foreign Contribution Regulation Act, but they are part of a larger political agenda that had been part of Indian politics for decades and has also become a more intense attack on what remains of India’s historic commitment to a diversity of religions and freedom of political expression.

Several years ago, the highlight of the focus was the attack on Greenpeace, largely for its opposition to a giant coal-fired plant near the megacity of Chennai, but that was just the point of the spear.  Thousands of nonprofits were delisted at the same time, ostensibly for technical issues, but it was hard to disguise the pattern.  Visas were refused to many attached to nonprofits.

The new version of the FCRA is more draconian and chilling.  All organizations with an FCRA registration will now be required to establish an account at the State Bank of India through its branch in New Delhi, and all financial activity is restricted to that account, so that the government can monitor it fully.  Administrative expenses that were allowed to be 50% of the grant were dialed back to 20%, largely in an effort to restrict the level of compensation that nonprofits staff might be receiving via foreign grants.  No sub-grants from an FCRA qualified organization may be given to other organizations, including nonprofits that are properly registered in India to only accept contributions domestically, nor can there be a re-granting of money received by an FCRA nonprofit.  The new law does allow an organization to surrender their FCRA number, but the assets will be transferred to the appropriate governmental agency.  Any new staff or board members will to give their Aadhaar details, which is the 12-digit biometric number containing an Indian’s full set of demographic details, which is also chilling.

The headliner this time around has been Amnesty International, which has indicated that it is withdrawing from India because of harassment by the government.  Amnesty had tried to recast its operations as a private corporation rather than FCRA qualified, but the government blocked that path as well.  Observers in India note that in the hyper-Hindu focused BJP government much of the attack is on religious funding and affiliated organizations as well.

The fear of foreign funding isn’t new in Indian politics.  Indira Gandhi shut all such funding off when she declared martial law from 1975-1977.  In an amazing unprecedented and never repeated decision, Misereor, the funding arm of the German Catholic Bishops, granted a community organization in Kolkata the equivalent of more than twenty years funding in advance before the cutoff.  Times change.  A report from the US-based Council of Philanthropy carries the cutline:  Until new rules are released by the Indian government, current guidance from legal experts recommends that all funders cease making grants to India.

Estimates from India-based think tanks believe these actions could push 100 million Indians back into poverty.  Others express amazement that the new coalitions and inputs from donors to offset the pandemic’s effects in India will be undone.  The consensus seems to be that these actions are another step downward in India’s reputation as a secular democracy.  Certainly, the new law seems to have much in common with the actions taken and the threats perceived by authoritarian governments around the world over the danger of nonprofits to their power.