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Indian NGOs misusing foreign funds, support changes to FCRA: NCPCR

There are intelligence inputs that most of the time, money is received for development works but is used to train Naxalites, says Solicitor General Tushar Mehta

India CSR by India CSR
November 12, 2021
in Articles
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Indian NGOs misusing foreign funds, support changes to FCRA: NCPCR

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These amendments are under challenge in a set of petitions filed before the Supreme Court on which orders were reserved on Tuesday.

In an affidavit filed before the Supreme Court of India on November 6, the NCPCR highlighted the names of certain NGOs, including social activist Harsh Mander’s Centre for Equity Studies, where funds had allegedly been diverted or were received from suspicious sources.

The National Commission for Protection of Child Rights (NCPCR) has supported the Centre’s concerns over misuse of foreign funds by non-government organizations (NGO) that prompted the Parliament to carry out amendments to the Foreign Contribution (Regulation) Act (FCRA). These amendments are under challenge in a set of petitions filed before the Supreme Court on which orders were reserved on Tuesday.

In an affidavit filed before the Court on November 6, the NCPCR highlighted the names of certain NGOs, including social activist Harsh Mander’s Centre for Equity Studies, where funds had allegedly been diverted or were received from suspicious sources. The cases have since been referred by the Commission to the Union ministry of home affairs (MHA) for further probe.

The Commission, in its affidavit filed through advocate Swarupama Chaturvedi, said, “There are NGOs which have FCRA registration and there are some NGOs where violations of statutory provisions have been found….To stop the misuse of foreign funds by various NGOs, the NCPCR is continuously inspecting child care institutions (CCI) and taking various steps against NGOs who violate provisions of law.”

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Also Read: Supreme Court asks – Why is the Home Ministry tasked to monitor foreign funds for NGOs – India CSR Network

ED and Harsh Mander’s NGO Centre for Equity Studies

About Harsh Mander’s NGO Centre for Equity Studies which is facing a probe by the Enforcement Directorate and Delhi Police Economic Offences Wing for allegedly misappropriating funds and laundering of money, the Commission said, “The NCPCR has sent letters dated November 30, 2020, and June 24, 2021, to the MHA to look into the foreign funds being received by Centre for Equity Studies and ‘ARUN’ and further utilization of the same fund.”

Though the Centre for Equity Studies has FCRA registration and is entitled to receive foreign funding, the Commission found that the NGO gave funds to another NGO, namely Rainbow Foundation India which does not have FCRA registration but runs CCIs in various cities across the country. On inspection of these children’s homes, the Commission found them to be running in violation of various provisions under the Juvenile Justice Act and Protection of Children from Sexual Offences Act.

A bench of Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar concluded hearing arguments in three petitions filed by one Noel Harper and NGO Jeevan Jyothi Charitable Trust and a separate one by one Vinay Vinayak Joshi which is supporting the amendments.

Disclose the purpose

The amendments require mandatory registration by NGOs for receiving foreign funds and disclose the purpose – such as social, religious, cultural, economic, etc. for receiving funds. The NGOs are further required to open an account with the State Bank of India which alone could receive foreign funds and the same could then be transferred to the local banks where NGOs have their accounts. Other significant features of these amendments include the prohibition to transfer funds from a registered NGO to an unregistered NGO, diverting funds for purposes other than those specified during registration and a cap on spending funds for administrative expenses.

Naxal Connection

Solicitor General Tushar Mehta appearing for the Centre argued that these amendments cannot be objected to by NGOs which have nothing to hide. He cited examples of NGOs where funds are being received from suspicious sources and being utilized to fund subversive activities. “There are intelligence inputs that most of the time, money is received for development works but is used to train Naxalites,” Mehta said.

The NCPCR affidavit cited one such example where inspection of five children homes in Assam and one in Manipur revealed how the children were kept in these homes without being produced before the Child Welfare Committees and with no registration as mandated under the Juvenile Justice Act 2015. These homes were being run under the aegis of Markaz-ul-Maarif and one of the homes in Dhubri was receiving funds from a suspect Turkish organization called IHH since 2016 for a project named ‘Akika’.

Also Read: India’s Supreme Court says No foreign funds for NGOs if purpose not declared – India CSR

On a deeper probe, the Commission found that IHH had been interrogated by the Turkish law enforcement officers for their alleged links with international organizations which prima facie points towards suspicious activities of this NGO. “There is apprehension based on some documents received by NCPCR during the inspection that details of children could be shared by the CCI with the international organization,” the Commission stated in its affidavit.

In addition, the Commission also named other NGOs that were found to operate in violation of provisions of the JJ Act and were found to engage in maltreatment of children and religious conversion, which were not part of their avowed purposes of the establishment.

Senior advocate Gopal Shankarnaraynan appearing for one of the petitioners told the court that they were willing to work under the framework of law but some of these amendments will prohibit NGOs from carrying out genuine work.

Also Read: Indian NGOs misusing foreign funds, support changes to FCRA: NCPCR – India CSR Network

Before enacting the amendments, the Centre noted that foreign contributions had doubled during the years 2010-19 and several recipients of foreign funding had not utilized the funds for the purposes specified for receiving donations.

The Court allowed Centre and petitioners to submit notes of their submissions within this week as it reserved the matter for pronouncing judgment. (The HT Report)


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Tags: Advocate Swarupama ChaturvedCentre for Equity StudiesFCRA for NGOsHarsh ManderIndia Foreign Contribution (Regulation) Act (FCRA)Juvenile Justice Act 2015National Commission for Protection of Child Rights (NCPCR)Solicitor General Tushar MehtaSupreme Court of India
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India CSR is the largest media on CSR and sustainability offering diverse content across multisectoral issues on business responsibility. It covers Sustainable Development, Corporate Social Responsibility (CSR), Sustainability, and related issues in India. Founded in 2009, the organisation aspires to become a globally admired media that offers valuable information to its readers through responsible reporting.

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