District Magistrates to Monitor FCRA Funds

To keep a closer watch on foreign contributions to Non-Government Organisations (NGOs), including religious trusts, the home Ministry proposes to allow district magistrates to monitor the inflow and spending.

The Ministry plans to amend the Foreign Contribution (Regulation) Act (FCRA), projecting the move as a step towards decentralisation, but has met with criticism from minority organisations and NGOs. The general feeling among NGOs is that the move will suppress the voice of genuine voluntary groups. They prefer to be guided by rules that are applied to the corporate sector when investments are made by foreign companies and believe that the Foreign Exchange Management Act can be effectively used to monitor funds inflow.

NGOs are pressing for abolition of the FCRA, a law that was used by the Congress during the Emergency to crack down on organisations working closely for Jaya Prakash Narayan's pro-democracy movement.

The FCRA was amended two years ago, directing minority religious organisations to regularly report to the district administration about the source of their funds, the nature of the work for which the money is used and their past and current activities. Having done this, the Government now wants to take the process further and bring NGOs within the ambit of this law. The September 11 terrorist strikes and the attack on Parliament have given the Ministry a valid reason to monitor all funds inflow from overseas.

The US Government's decision to look into the accounts of suspected organisations have made it easier for Delhi to initiate the move.

Aware that money is sent into and out of the country through hawala transactions by terrorists and criminals, no political party in Parliament can object to the Government amending the FCRA to keep a watch on the finances of NGOs.

Source: Local scrutiny of NGO cash, The Telegraph India April 24, 2002, New Delhi