Time govt stopped foreign funding of Civil Society groups

Among the largest members of the Indian economy is the NGO sector or what is known as the Third Sector or Civil Society (other than government and private) in academic circles. Two important criteria are that they should be independent from government and organisations not meant for making profit. But many get money from the government or from foreign governments. The type of activities they are involved is mind-boggling which can extent from “aging issues” to “corruption” to “human rights” to “waste management”. Many of them call themselves “Civil Society” and involve in socio-political activities even though they do not directly participate in the electoral process. Many of Church-related organisations involve themselves in human rights issues as a civil society organisation.

The funding for many of these civil society groups is substantially international. The international flow of funds is regulated by the Foreign Contributions Regulation Act [FCRA Act] of the Central Government which the ministry of home affairs is re-formulating now. In the ten years from 2000 to 2009 such organisations received more than Rs 69,000 crore and in the year 2008-09 [of which data is available] it was Rs 10,800 crore. The total number of such organisations was 36,000 in 2008-09 and of them only 20000 [55%] reported their accounts. The list of donor countries is headed by the US (Rs3, 433 crore) followed by the UK
(Rs1,131 crore) and Germany (Rs1,103 crore).

The highest amount of foreign contribution was received and utilized for establishment expenses (Rs 5,022 crore)), followed by rural development (Rs 2,834 crore) etc. Establishment expenses consist of buying land, buildings, jeeps, setting up offices, mobiles, laptops, cameras, salaries, consultancy fees, honorarium, and foreign travel etc., constituting nearly 50 % of the expenses and in some cases as high as 70%. This goes against the grain of service motto where the ultimate recipient is supposed to get the maximum. Now, such organisations even recruit “executives” from management institutions.

However, they are not covered by Right to Information Act as they are not part of government. For instance, this writer has tried unsuccessfully to get the annual accounts from the web site of the top 25 recipients, many of whom are often reported in newspapers and TV and stressing the importance of “transparency” in the functioning of the government. Many do not have any information on their web sites. Some of the web sites contain nothing on finances.

Take the site called Friends of Narmada which proclaims: “First, we want to make it clear that we are NOT the Narmada Bachao Andolan (the NGO led by Medha Patkar)”. ‘Friends of Narmada’ has a solidarity network which includes the International Rivers Network which received donations of more than $1 million each from eight organisations including from the Ford foundation during 2008 -according to its web site. Why cannot Friends of Narmada voluntarily post its balance sheet and other accounts on their web site? Ditto all top notch civil society groups who day in day out harangue us on TV talk shows about transparency and disclosures that the government and corporate sector etc., should make.

Recently Russia has approved a bill that introduces stringent control over the activities of foreign funded non-government and non-commercial organisations in a move designed to pre-empt any “coloured revolution” in the country. It says, and to quote “The Kremlin has learnt its lessons from a string of “coloured revolutions” in the former Soviet Republics— the “rose revolution in Georgia, the “orange revolution” in Ukraine and the “tulip revolution” in Kyrgyzstan— all inspired and orchestered by western-funded Civil Society groups”. Incidentally, there is an act in the USA called Foreign Agents Registration Act [FARA] and it provides for penalties up to ten years in jail for acting as a foreign agent or getting foreign funds without notification to the Attorney General. FARA was originally passed in 1938 to prevent the spread of Nazi ideas and propaganda.

It is important that the Government of India bans foreign funding of civil society groups and NGOs who want to reform India. We are no more the “white man’s burden”.

— The author is professor of Finance and Control, Indian Institute of Management-Bangalore, and can be contacted at vaidya@iimb.ernet.in. The views are personal and do not reflect that of his organisation