- FCRA regulation issue: Most NGOs don’t have SBI account
- Bangladesh rebuffs China on Quad warning
- Rajasthan MLA Local Area Development (LAD) Fund
FCRA regulation issue: Most NGOs don’t have SBI account
- An Assam-based NGO has moved the Gauhati High Court against another amended provision of the Foreign Contribution (Regulation) Act (FCRA) that makes Aadhaar mandatory for opening and operating the account in Delhi.
- Only 16% registered NGOs have active bank accounts with the State Bank of India’s main branch in Delhi, a compulsory requirement to receive foreign funds from April 2021.
GS-II: Polity and Governance (Government Policies & Interventions, Non-Governmental Organisations -NGOs), GS-III: Indian Economy (External Sector, Mobilization of Resources)
Dimensions of the Article:
- Foreign Contribution (Regulation) Act, 2010
- Foreign Contribution (Regulation) Amendment Act, 2020
- Non-Governmental Organisations (NGOs) in India
- Why have NGOs been controversial recently?
- About the recent MHA guidelines regarding FCRA and NGOs
- About the recent case in Gauhati HC regarding NGOs
Foreign Contribution (Regulation) Act, 2010
The Foreign Contribution (regulation) Act, 2010 is a consolidating act whose scope is to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected therewith or incidental thereto.
Key Points regarding FCRA
- Foreign funding of voluntary organizations in India is regulated under FCRA act and is implemented by the Ministry of Home Affairs.
- The FCRA regulates the receipt of funding from sources outside of India to NGOs working in India.
- It prohibits the receipt of foreign contribution “for any activities detrimental to the national interest”.
- The Act held that the government can refuse permission if it believes that the donation to the NGO will adversely affect “public interest” or the “economic interest of the state”. However, there is no clear guidance on what constitutes “public interest”.
- The Acts ensures that the recipients of foreign contributions adhere to the stated purpose for which such contribution has been obtained.
- Under the Act, organisations require to register themselves every five years.
Foreign Contribution (Regulation) Amendment Act, 2020
- The Act bars public servants from receiving foreign contributions. Public servant includes any person who is in service or pay of the government, or remunerated by the government for the performance of any public duty.
- The Act prohibits the transfer of foreign contribution to any other person not registered to accept foreign contributions.
- The Act makes Aadhaar number mandatory for all office bearers, directors or key functionaries of a person receiving foreign contribution, as an identification document.
- The Act states that foreign contribution must be received only in an account designated by the bank as FCRA account in such branches of the State Bank of India, New Delhi.
- The Act proposes that not more than 20% of the total foreign funds received could be defrayed for administrative expenses. In FCRA 2010 the limit was 50%.
- The Act allows the central government to permit a person to surrender their registration certificate.
Non-Governmental Organisations (NGOs) in India
- Worldwide, the term ‘NGO’ is used to describe a body that is neither part of a government nor a conventional for-profit business organisation.
- NGOs are groups of ordinary citizens that are involved in a wide range of activities that may have charitable, social, political, religious or other interests.
- In India, NGOs can be registered under a plethora of Acts such as the Indian Societies Registration Act, 1860, Religious Endowments Act,1863, Indian Trusts Act, etc.
- India has possibly the largest number of active NGOs in the world.
- Ministries such as Health and Family Welfare, Human Resource Department, etc., provide funding to NGOs, but only a handful of NGOs get hefty government funds.
- NGOs also receive funds from abroad, if they are registered with the Home Ministry under the Foreign Contribution (Regulation) Act (FCRA). There are more than 22,500 FCRA-registered NGOs.
- Registered NGOs can receive foreign contribution under five purposes — social, educational, religious, economic and cultural.
Why have NGOs been controversial recently?
- An Intelligence Bureau (IB) report, submitted to the PMO and National Security Adviser in 2019, alleged that several foreign-funded NGOs were stalling India’s economic growth by their obstructionist activism.
- In 2015, the Home Ministry had cancelled the FCRA licences of 10,000 organisations.
- The annual inflow of foreign contribution has almost doubled between the years 2010 and 2019, but many recipients of foreign contribution are being not utilised the same for the purpose for which they were registered or granted prior permission under amended provisions of the FCRA 2010.
- Recently, the Union Home Ministry has suspended licenses of the six (NGOs) who were alleged to have used foreign contributions for religious conversion.
- Recently the National Investigation Agency (NIA) registered a case against a foreign based group that provides funds for secessionist and pro-Khalistani activities in India.
About the recent MHA guidelines regarding FCRA and NGOs
- The Ministry of Home Affairs (MHA) issued new regulating guidelines to banks under Foreign Contribution (Regulation) Act, 2010. It states that the donations received in Indian rupees by non-governmental organisations (NGOs) and associations from any foreign source (even if that source is located in India at the time of such donation) should be treated as foreign contribution.
- Under the issued regulations, donations given in Indian rupees (INR) by any foreigner/foreign source including foreigners of Indian origin like Overseas Citizen of India (OCI) or Person of India Origin (PIO) cardholders should also be treated as foreign contribution.
- The guidelines mandate that good practices should be followed by NGOs in accordance with standards of global financial watchdog- Financial Action Task Force (FATF).
- MHA asked NGOs to inform the Ministry about “suspicious activities” of any donor or recipient and “take due diligence of its employees at the time of recruitment.”
About the recent case in Gauhati HC regarding NGOs
- The Gauhati High Court sent a notice to the SBI asking it to explain why Aadhaar was necessary to open a bank account, when in 2018, the Supreme Court in the K.S. Puttaswamy (Aadhaar) case had ruled that mandatorily linking Aadhaar to a bank account “does not satisfy the test of proportionality”.
- According to the amended provisions of the FCRA enacted in September 2020, the NGOs registered under the Act were asked to open a designated bank account at the SBI, Delhi and compulsorily register the Aadhaar details of the chief functionaries, trustees and office-bearers.
- The amendment stated that all the existing FCRA accounts of the NGOs will be linked to the SBI account in Delhi, and while they may not be able to receive fresh foreign funds from April 1 in the existing accounts, they could utilise the money that already exists in the old account.
- Due to the COVID-19 pandemic, many NGOs could not complete the stringent paper work, making it impossible for foreign donors to send help during the second wave that has now spread to rural areas. Many said that they did not fulfil the eligibility criteria as they did not possess an Aadhaar card as a “matter of principle”.
-Source: The Hindu
Bangladesh rebuffs China on Quad warning
- China’s ambassador in Dhaka said that it will not be a good idea for Bangladesh to participate in the Quad because it will substantially damage their bilateral relationship with China.
- Bangladesh’s government has asked foreign envoys in Dhaka “to maintain decency and decorum” after public remarks from China’s Ambassador to the country provoked a sharp response.
GS-II: International Relations (India’s Neighbors, International Groupings, Foreign Policies and Developments affecting India’s Interests)
Dimensions of the Article:
- What is the Quad grouping?
- Significance of Quad
- China’s views
What is the Quad grouping?
- The Quadrilateral Security Dialogue (QSD) also known as Quad, is an Inter-governmental security forum. It comprises of 4 countries– India, the United States, Japan and Australia. The member countries of the Quad organise summits, exchanges the information and military drills.
- In the year 2007, Prime Minister of Japan Shinzo Abe proposed the Quadrilateral Security Dialogue. The forum was joined by the Vice President of the US Dick Cheney, Prime Minister John Howard of Australia and Indian Prime Minister Manmohan Singh. It was paralleled by joint military exercises of an unprecedented scale with the name Exercise Malabar.
- India’s past experiment: Over the years, India has experimented with alliances of different kinds:
- During World War I, some nationalists aligned with imperial Germany to set up the first Indian government-in-exile in Kabul.
- During World War II, Subhas Chandra Bose joined forces with imperial Japan to set up a provisional government in Port Blair.
- Jawaharlal Nehru, who unveiled and championed non-alignment, signed security treaties with Bhutan, Nepal, and Sikkim. Also, Nehru, who actively opposed American alliances in Asia, turned to the US for military support in 1962.
Significance of Quad
- Maritime security: Indo pacific region is important for navigation and international trade e.g., Around 40 percent of world trade passes through Indo pacific region. The cooperation between Quad countries will enhance the security of Indo pacific region e.g., Malabar exercise.
- It provides the alternative of the Regional Comprehensive Economic Partnership (RCEP) because it is China-centric supply chains.
- The Resilient Supply Chain Initiative (RSCI) proposed by India, Japan and Australia for building resilient supply chains in the Indo-Pacific. It will focus on key sectors such as semi-conductors, pharmaceuticals, automobiles and telecommunications.
- It provides a bigger space for USA, which cautioned China against risking military adventurism across the Taiwan Strait that would have otherwise derailed its economic ascendance, and kept the peace on the Korean Peninsula for over six decades.
- The quad will help to reduce the role of China in the Indian Ocean e.g., China uses the cloak of anti-piracy deployments to maintain a quasi-permanent presence, with bases in Gwadar and Djibouti as beachheads for penetrating South Asia, the Gulf region and littoral Africa.
- Cyber security: the 21th century is data driven century therefore data security is crucial for socio economic development. The Quad countries can cooperate the enhance the cyber security.
- Quality infrastructure: The Quad countries can focus on quality infrastructure which is crucial for economic activities e.g., India can take help to Japan and USA to enhance its infrastructure.
- Healthcare: The Quad countries can cooperate to enhance health infrastructure to fight against pandemic like Covid-19.
- China’s Navy had not at the time undergone its massive modernisation drive towards a blue water navy and the effort by the Quad countries was clearly an impetus to hasten the process.
- The exercises and the strategic coordination between these countries rattled Beijing and Moscow, who termed it an attempt to build “an Asian NATO”.
- The China criticised the Quad, stating that Washington was aiming to build an “Indo-Pacific NATO” through the Quad.
- China continues to employ ancient stratagems to pit one nation against another on its periphery to weaken and subjugate contending forces through guile and inducements.
-Source: The Hindu
Rajasthan MLA Local Area Development (LAD) Fund
The Rajasthan Government has approved a proposal to provide Rs. 3 crore each from the MLA Local Area Development (LAD) Fund to mobilise resources for Covid-19 Vaccination of the people in the age group of 18 to 44 years.
For meeting the expenses, the fund for each legislator has been increased from Rs. 2.25 crore to Rs. 5 crore a year.
GS-II: Social Justice (Central Sector Schemes, Government Policies & Interventions)
Dimensions of the Article:
- About the Members of Legislative Assembly Local Area Development (MLA-LAD) Scheme
- Members of Parliament Local Area Development (MP-LAD)
- Features of MPLADS scheme
- Release of Funds under MPLADS
About the Members of Legislative Assembly Local Area Development (MLA-LAD) Scheme
- Members of Legislative Assembly Local Area Development (MLA-LAD) Scheme is the is the States’ version of a central government scheme – Members of Parliament Local Area Development Scheme (MPLAD).
- The objective of this scheme is to create local need-based infrastructure, to create assets of public utility and to remove regional imbalances in development.
- This scheme is implemented in rural areas as well as urban areas of a state.
- MLAs do not receive any money under this scheme. The government transfers it directly to the respective local authorities.
- The legislators can only recommend works in their constituencies based on a set of guidelines.
- Amounts per MLA varies across the states and so does the guidelines for use of MLA-LAD funds. Delhi has the highest allocation under MLALAD; each MLA can recommend works for up to Rs. 10 crore each year.
Members of Parliament Local Area Development (MP-LAD)
- Members of Parliament Local Area Development Scheme (MPLADS) is an ongoing Central Sector Scheme which was launched in 1993-94.
- The Scheme enables the Members of Parliament to recommend works for creation of durable community assets based on locally felt needs to be taken up in their constituencies in the area of national priorities namely drinking water, education, public health, sanitation, roads etc.
- Nodal Ministry: The Ministry of Statistics and Programme Implementation has been responsible for the policy formulation, release of funds and prescribing monitoring mechanism for implementation of the Scheme.
Features of MPLADS scheme
- The annual MPLADS fund entitlement per MP constituency is Rs. 5 crore.
- MPs are to recommend every year, works costing at least 15 per cent of the MPLADS entitlement for the year for areas inhabited by Scheduled Caste population and 7.5 per cent for areas inhabited by S.T. population.
- In order to encourage trusts and societies for the betterment of tribal people, a ceiling of Rs. 75 lakhs is stipulated for building assets by trusts and societies subject to conditions prescribed in the scheme guidelines.
- Lok Sabha Members can recommend works within their Constituencies and Elected Members of Rajya Sabha can recommend works within the State of Election (with select exceptions).
- Nominated Members of both the Rajya Sabha and Lok Sabha can recommend works anywhere in the country.
- All works to meet locally felt infrastructure and development needs, with an emphasis on creation of durable assets in the constituency are permissible under MPLADS as prescribed in the scheme guidelines.
- Expenditure on specified items of non-durable nature are also permitted as listed in the guidelines.
Release of Funds under MPLADS
- Funds are released in the form of grants in-aid directly to the district authorities.
- The funds released under the scheme are non-lapsable.
- The liability of funds not released in a particular year is carried forward to the subsequent years, subject to eligibility.
Execution of works:
- The MPs have a recommendatory role under the scheme. They recommend their choice of works to the concerned district authorities who implement these works by following the established procedures of the concerned state government.
- The district authority is empowered to examine the eligibility of works sanction funds and select the implementing agencies, prioritise works, supervise overall execution, and monitor the scheme at the ground level.
-Source: The Hindu