FOREIGN FUNDING REGULATIONS FOR NGOS MAY BE TIGHTENED

NEW DELHI: The Union home ministry is considering further tightening the foreign funding regulations for non-governmental organisations (NGOs) and donor agencies working in the country.

The ministry has found out that around 100 NGOs and donor agencies that are working in the country by merely being registered under the Foreign Exchange Management Act (FEMA), which stipulates norms for foreign exchange transactions in the country. “But we want all NGOs and donor agencies, which are registered under FEMA so far, to be covered under the Foreign Contribution Regulation Act (FCRA), which governs foreign funding of NGOs,” said a home ministry official on condition of anonymity.

The FCRA-registered NGOs need to provide quarterly reports to the ministry on foreign funds received and spent. They also need to have a dedicated bank account for receiving foreign funds. Non-submission of reports to the ministry may lead to cancellation of their FCRA registration. The government keeps a tab on NGOs to see if the funding is being used for intended purpose and, more importantly, not used for activities that can affect the country’s security, economic or territorial.

The issue of donor agencies being registered under FEMA has been deliberated in the home ministry for long. It also came up for discussion when the ministry put international donor agency Ford Foundation on the watchlist under which any grant by the foundation had to be vetted by the ministry before being disbursed to the recipient.

Ford Foundation was taken off the watch list following its registration under FEMA on home ministry’s instructions. “FCRA registration will bring transparency and uniformity in foreign funding regime,” added the official.

THE ISSUE OF DONOR AGENCIES BEING REGISTERED UNDER FEMA HAS BEEN DELIBERATED IN THE MINISTRY FOR LONG