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Is it time to tighten foreign funding norms after the Vedanta Sterlite affair?

Is it time to tighten norms around foreign funding?

A non government organisation—The Other Media has come under the scanner. According to government data, between 2019-20 and 2021-22, the NGO received contributions to the tune of Rs 3.54 crore but an amount of Rs. 2.79 crore remained utilized. The NGO has allegedly misused funds for organizing protests and demonstrations around Vedanta’s Sterlite Copper Plant in Tamil Nadu’s Thoothikudi.

The issue was raised by Congress MP Naranbhai J Rathwa in Rajya Sabha two days ago. Rathwa also asked if the Centre would consider banning this NGO for anti-national activity.

“In case violations of provisions of the FCRA, 2010 are found, the certificate of FCRA registration of the association may be cancelled under section 14 of the Act,” Nityanand Rai, junior minister at the Ministry of Home Affairs said in a written reply.

The Foreign Contribution (Regulation) Act of 2010 aims to regulates the inflow of foreign contributions, donations or aid from outside India. Entities registered as trusts, societies or NGOs among others that receive foreign contribution or donation from sources outside India need to obtain registration under Section 6(1) of FCRA. The act is also to ensure that the foreign contributions are not being used for activities denting the national interest.

According to official data, foreign funding of Rs 55,449 crore has been received by NGOs in India in the past three years.

While in 2019-20, a total of Rs 16,306.04 crore was received by NGOs, the figure was Rs 17,058.64 crore in 2020-21. In 2021-22, it amounted to Rs 22,085.10 crore.

Delhi based NGOs received the maximum chunk comprising Rs 13,957.84 crore. Tamil Nadu NGOs, which received Rs 6,803.72 crore ranked second while Karnataka was third with Rs 7,224.89 crore.

The Centre had relaxed FCRA norms during the Covid pandemic to ease flow of funds into the country. “Though the move was aimed at helping individuals and institutions alike amid the catastrophic impact of the pandemic, a closer scrutiny is required to ensure discrepancies as it is possible that many took advantage of the same,” a legal expert said.

Addressing civil service aspirants Tamil Nadu, RN Ravi, Governor said the protest against the Sterlite copper plant was “fully funded by foreign countries”. In May 2018, massive protests claiming environmental violations broke out. The protests went on for 100 days, eventually leading to closure of the plant incurring a loss of more than Rs 14,000 crore to the company.

“Through the data collected and analysed for the purpose of this report, the consolidated loss to the economy owing to closure of the copper plant on all stakeholders is estimated to be around Rs 14,749 crore since its closure in May 2018,” a report prepared by CUTS International said, adding that it has also led to a loss for the government.

Also read: NIA arrests fifth Kashmir journalist in NGO terror funding case