Nonprofits say India’s new rules on foreign funding will affect their operations

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By Devjyot Ghoshal

NEW DELHI, Oct. 1 (Reuters) – India’s stricter rules on foreign funding for nonprofits will seriously hamper their operations, heads of some organizations said on Thursday, after the rights group human rights Amnesty International has suspended its activities in the country, citing harassment by the government.

Changes to the law governing overseas contributions last month include a ban on money transfers to other groups and a 20% spending limit on administrative costs, such as staff and office space.

“It’s a climate where you can clearly see patterns in which the space for civil society is shrinking,” Amitabh Behar, chief executive of the Indian branch of Oxfam, a group of 20 international NGOs, told Reuters. .

“It’s hushed up, and the message is very depressing for the nonprofit sector.”

India has around 3 million registered nonprofits, but since 2017 it has revoked the authorization of more than 6,600 charities to receive overseas funding as successive governments have stepped up their scrutiny.

London-based Amnesty International said on Tuesday it was halting work in India, accusing the government of a “witch hunt” and blocking its bank accounts.

India’s Home Office said the group was circumventing foreign contribution rules by illegally receiving money from the UK branch.

“The frightening effect comes from many corners and that only brings it straight back to us,” Behar added, referring to the Amnesty shutdown.

Prime Minister Narendra Modi’s government said rule changes were needed to strengthen accountability for receiving and using foreign funding, as few groups met basic statutory requirements or used the funds properly.

The government said it had launched criminal investigations into dozens of groups for embezzling these funds.

The new administrative expense cap, lowered by 50%, presents a challenge because the category typically includes staff costs, the nonprofit groups said.

Large nonprofits typically work with dozens of smaller partners to run programs and projects, and not being able to transfer funds to them would disrupt the industry, the Indian arm of ActionAid said.

“This would limit the number of … social workers and organizations serving vulnerable people, and restrict grants to small organizations already on the FCRA approved list,” said Sandeep Chachra, executive director of the Association. ActionAid.

He was referring to the Foreign Contribution (Regulation) Act (FCRA), dating from 1976, a period of national emergency declared by then Prime Minister Indira Gandhi, which was seen as using the law to target critics of a crackdown on civil rights.

Today, more than 22,400 organizations registered under the law are authorized to use foreign contributions to fund cultural, economic, educational, religious or social programs, according to the Home Office.

In the three years until 2019, they received 581 billion rupees ($ 8 billion) in these funds.

($ 1 = 73.3851 Indian rupees)

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