First published on India Today: https://www.indiatoday.in/business/story/covid-19-why-ngos-are-demanding-immediate-suspension-of-fcra-rules-1804106-2021-05-18
Several NGOs and relief organisations have urged the central government to temporarily relax or suspend FCRA rules as it will help them receive foreign funding to help people during the second Covid-19 wave. Here is all you need to know.
At a time when Covid-19 has overwhelmed the public healthcare system, several non-profit organisations have been setting up facilities to help treat patients in both rural and urban areas.
Most of these non-profit organisations are facing a fund crunch and have urged the central government to temporarily suspend foreign funding rules under the Foreign Currency Regulation Act (FCRA) Act.
Cash-strapped NGOs have been requesting the home ministry for the last six to seven months for the waiver. However, no such decision has been announced so far.
Several NGOs said they are struggling to arrange adequate funds to provide urgent relief to people who have been affected by the pandemic. Relaxing foreign funding rules could significantly help such philanthropic organisations ramp up efforts to help individuals who are not receiving proper treatment, especially in rural areas.
Read | Why NGOs fear the new FCRA regulations
A joint statement has been released by many voluntary organisations and NGOs including the Centre for Advancement of Philanthropy in Mumbai, National Foundation of India in New Delhi, Child Rights and You in Maharashtra, Bhumi in Tamil Nadu and more.
They have asked the home ministry to extend the due date for the renewal of FCRA registrations that are expiring in October 2021 by at least a year.
The organisations said they are struggling to help needy people due to the regulatory compliance burden pertaining to FCRA rules. They mentioned in the letter that their response to the second wave of Covid-19 has been hampered by a slew of regulatory changes that were initiated in 2020.
They also highlighted that foreign donations are blocked as the State Bank of India (SBI) is “unable to turnaround account openings in a timely fashion”. The NGOs said that many people who want to make donations from abroad are struggling to find NGOs that are able to receive foreign funding.
FCRA Rules for NGOs
It may be noted that the rules amended by the Centre for FCRA came into effect from September 2020 and empowered the government to hold a “summer inquiry” and order a violator to not use foreign funding. Earlier, this rule was only applicable to an association that was found guilty of violating the FCRA act.
Under the amended rules, all NGOs were required to register under FCRA to open an account at a specified branch of SBI by March 31, 2021. However, the limit of the administrative expenses was reduced from 50 per cent to 20 per cent.
How will FCRA Relaxation Help?
Relaxing the FCRA rules will also help NGOs and other philanthropic organisations use foreign funding and donations to ramp up the supply of critical healthcare equipment and also respond to community needs, especially in rural areas.
It may be noted that the second wave of Covid-19 is now affecting people in rural areas, where healthcare facilities are much weaker than urban areas.
Many villages are witnessing a spike in Covid-19 cases and deaths, but are unable to access proper healthcare and treatment due to lack of facilities. In such a scenario, these NGOs and voluntary relief organisations could provide a backbone to India’s weak rural healthcare infrastructure.
However, the current rules are preventing NGOs to accept funding from foreign donors.
A report had earlier indicated that the FCRA rules are likely to be relaxed after May 31, 2021, when NGOs apply for licence renewal. However, conceding the magnitude of the crisis, NGOs have appealed for immediate suspension or waiver.
The NGOs have also asked the government to allow overseas donors to send funds for Covid relief and rehabilitation to institutions that do not have FCRA registration.
While daily Covid-19 cases in India have been dipping, the situation remains grim as the country reported the highest number of deaths on Tuesday.
