Shri. Prime Minister Manmohan Singh

Prime Minister of India

North Block Parliament House

Government of India

New Delhi 110001

VIA FACSIMILE

Dear Prime Minister,

We write to you about the Foreign Contribution (Regulation) Act (FCRA), which the Indian parliament passed in 1976 during a state of emergency, and a proposed new bill, the Foreign Contribution (Regulation) Bill, 2006 (FCRB), which your government introduced to the Rajya Sabha in December 2006. The new bill was referred to the parliamentary standing committee and is presently awaiting cabinet approval before being placed for enactment. If adopted, it will replace the FCRA.

Initially, the primary purpose of the FCRA was to prohibit political parties, politicians, and election candidates from accepting foreign material and financial support in order to ensure that Indian elections were not affected by foreign interests. However, provisions were also included which made it compulsory for associations considered to be of a “political nature” to obtain prior permission from the government before accepting any foreign contributions.

Through an amendment in 1985, the Act’s emphasis on nongovernmental organizations (NGOs) increased. Organizations having a “definite cultural, economic, educational, religious or social programme” have also been required to either register themselves with the government or receive its prior permission in order to accept foreign donations and contributions.

To address poverty, inequality, human rights, or other social problems, many NGOs accept foreign funding to carry out their lawful activities. Over the years, the FCRA has been used to block funding for and harass organizations that have exercised their lawful right of questioning or criticizing government policies and practices. This is surprising in a robust democracy. The application of the law in such ways not only constitutes a breach of the right to freedom of association, it also violates the right to freedom of expression, both of which are protected under international law and by India’s constitution.

The Ministry of Home Affairs, which is in charge of the Act’s implementation, considers the FCRA to be a way of ensuring that foreign contributions are not used in ways that may jeopardize India’s national security.1 This is a legitimate concern for all governments. However, the FCRA has little or no practical effect in preventing extremist groups from obtaining resources. Other laws, such as those relating to money laundering, are more effective, while the primary method of protecting national security is through strong law enforcement and intelligence gathering. Instead of protecting national security, the FCRA has had a stifling effect on the nongovernmental sector and a negative impact on the country’s development as a whole, depriving many needy individuals and communities of desperately needed financial support.

Indian NGOs have for many years expressed their concerns about the FCRA and its implementation and have requested that the Act be amended. However, rather than addressing the problematic features of the FCRA, the FCRB introduces provisions which will further undermine the right of organizations to seek and receive financial support. Its explicit purpose, as stipulated in the preamble of the Bill, is to prohibit the use of foreign support for any activities detrimental to the “national interest.” As you know from your time in the political opposition, the government of the day can define the “national interest” quite broadly, often equating the national interest with their more narrow political interests. In this way, the FCRA has been used as a political tool and lever against organizations critical of the government or its departments.

The FCRB, in Section 11(3), substantially expands the powers of the government to make its prior permission a condition for an organization to accept a foreign contribution. Under the Bill, the government can decide that prior permission should be required for:

  • an entire class of associations;
  • any specific geographic areas;
  • any specific purposes; and
  • any specific sources.

The government can thus decide, for instance, that religious organizations or human rights groups cannot accept any contributions. It can also decide that no contributions can be received by organizations in a particular state, or for work relating to a politically sensitive issue, or from a particular donor agency. Such restrictions would be a direct violation of international law.

Freedom of association and expression are regarded as fundamental rights in international law and are laid down in such instruments as the Universal Declaration of Human Rights,2 adopted by the United Nations General Assembly, and the International Covenant on Civil and Political Rights (ICCPR),3 to which India is a state party. They are also guaranteed under the Indian Constitution.4

While it is appropriate to regulate and scrutinize the financial affairs of not-for-profit organizations and NGOs to address corruption and legitimate national security concerns, both the existing FCRA and its proposed successor FCRB are too broad and unnecessarily impinge on the activities of bona fide organizations attempting to address social issues in India. Article 22 of the ICCPR, to which India is a state party, allows restrictions on the right to freedom of association only if they are “necessary in a democratic society.” Neither the FCRA’s nor the FCRB’s provisions regarding associations are necessary in a democratic society.

Organizations of a “political nature”

Of particular concern are limits on contributions to organizations of a “political nature.” Section 4 of the FCRA bans, among others, political parties from receiving any foreign contributions. Such a requirement is common in democratic states and is not in contravention of international human rights law. However, under Section 5 other organizations considered to be of a “political nature” are also required to obtain prior permission of the government before accepting any such contributions. Under Section 3(1)(f) of the FCRB, these type of organizations will face an absolute prohibition on receiving foreign funding in the same way as political parties. Both the FCRA and FCRB give broad discretionary powers to the government to declare an organization to be of such nature on the basis of its regard to the organization’s (i) activities, (ii) ideology propagated, (iii) program, or (iv) association with any political party.

Such provisions are anathema to freedom of association and have no place in a democracy. The term “political nature” is a vague and undefined concept susceptible to arbitrary and discriminatory interpretation against critics or those unpopular with those who administer the law. Any use of these provisions in such a manner constitutes a violation of the rights to freedom of association and expression.

Organizations with a “definite cultural, economic, educational, religious or social programme”

Under Section 6 of the FCRA, organizations which are not of a “political nature” but have a “definite cultural, economic, educational, religious or social programme” can only accept foreign contributions if they are registered with or receive prior permission from the government. The FCRA does not specify the grounds on which an association can be denied registration or prior permission, but the Ministry of Home Affairs has published a list of more than 20 common grounds for rejecting an application, including if “the credibility of any member of the governing body is in doubt,” or if one of the office bearers/trustees is “a foreign national, other than of Indian origin.”5 Furthermore, registration is only granted to associations that have a proven track record of functioning in their chosen field of work for a period of no less than three years.6

The published list of common grounds is only to be regarded as “illustrations” and leaves it open for the Ministry to reject an application for other reasons. As with organizations of a “political nature,” the organizations applying for registration under this section of the FCRA are subjected to the discretionary powers of the Ministry. This makes the decisions unpredictable and at times arbitrary.

Section 11 of the FCRB contains the same requirement as the FCRA for associations that have a “definite cultural, economic, educational, religious or social programme” to either reregister or obtain prior permission before accepting a foreign contribution. Section 12(3) of the FCRB sets out a number of conditions under which registration or prior permission should not be granted. For example, the government must be satisfied that the contribution is not likely to be diverted for “undesirable purposes,” and that the organization “has not indulged in activities aimed at conversion through inducement or force, either directly or indirectly, from one religious faith to another.” The organization must also have “prepared a meaningful project” or “undertaken meaningful activity in its chosen field that will benefit the people for which the foreign contribution is proposed to be utilized.”

The terms “undesirable purposes,” “meaningful project,” and “meaningful activity” are not defined in the FCRB, leaving them susceptible to abuse. With regard to conversion from one religion to another, the terms “inducement” and “indirectly” lack clarity and leave room for arbitrary implementation.  

Right to prohibit any organization from accepting a foreign contribution

According to Section 10 of the FCRA, the central government may prohibit any association from accepting any foreign contribution if it is satisfied that the acceptance of a contribution is “likely to affect prejudicially (i) the sovereignty and integrity of India; or (ii) the public interest; or (iii) freedom or fairness of election to any Legislature; or (iv) friendly relations with any foreign State; or (v) harmony between religious, racial, linguistic or regional groups, castes or communities.” Section 9 of the FCRB contains a similar provision, but adds harmony among “social” groups, castes, or communities to the grounds on which any association can be banned from accepting a foreign contribution. None of the grounds are further defined in FCRA or FCRB, making the risk of arbitrary decision making considerable.

Barring those convicted or facing prosecution

Under Section 12(3)(d and e) of the FCRB, none of the directors or office bearers of an organization can have either a past conviction or a pending prosecution for any offence. Prosecutions and past convictions which may be completely unrelated to the running of an organization do not constitute a legitimate ground for restricting freedom of association. Experiences from many parts of the world show that these types of provisions risk being used to unduly hinder individuals from establishing or managing organizations. In the Indian context, it may be worth noting that a person like Mahatma Gandhi, who established numerous voluntary organizations, spent several years in prison.

The right to development

Freedom of association is a right which states are required to respect and protect. But states must do more. Article 8(2) of the Declaration on the Right to Development, adopted by the UN General Assembly in 1986, obliges states to actively encourage popular participation in all spheres of society and, in Article 3(1), to create conditions favorable to the realization of the right to development. The FCRA has had the opposite effect.

India has long cited the existence of its vibrant civil society as a sign of the strength of its democracy. The Indian Government’s National Policy on the Voluntary Sector states, for instance, that, “The voluntary sector has contributed significantly to finding innovative solutions to poverty, deprivation, discrimination and exclusion, through means such as awareness raising, social mobilization, service delivery, training, research, and advocacy.”7

The National Policy on the Voluntary Sector started as a civil society initiative under the aegis of the Planning Commission, which you Chair. Not just a framework of partnership between the government and NGOs, it also stresses creation of an enabling environment to facilitate the development work of the voluntary sector. In this context, the FCRA and its proposed amendments should be made consistent with the provisions of the National Policy on the Voluntary Sector.

In order for people to be able to enjoy the right to freedom of association, NGOs must have the right to freely seek and receive financial and other resources for their management and activities. In recognition of this, Article 13 of the UN Declaration on Human Rights Defenders stipulates that, “Everyone has the right, individually and in association with others, to solicit, receive and utilize resources for the express purpose of promoting and protecting human rights and fundamental freedoms through peaceful means, in accordance with article 3 of the present Declaration.”8 Considering that annual UN General Assembly resolutions, beginning in 1998, have called upon all states to promote and give effect to the Declaration, the Office of the United Nations High Commissioner for Human Rights has urged states to ensure that there are no legislative obstacles limiting human rights defenders access to funding.9

However, as formulated and implemented, sections 4, 6, and 10 of FCRA constitute such legal obstacles. In its draft form, the FCRB expands the grounds on which organizations are prohibited from receiving foreign support; it allows for rejection of an application for registration or permission for receiving foreign support on grounds that are not “necessary in a democratic society”; and it limits the right to freedom of association of people who have a pending prosecution – which can be used as a form of intimidation or for political reasons – or a past conviction.

The right of NGOs to receive needed international funding has been recognized by democratic states, as well as by international organizations. Article 50 of the Council of Europe’s “Recommendation to Member States on the Legal Status of Non-governmental Organizations in Europe,” states that, “NGOs should be free to solicit and receive funding – cash or in-kind donations – not only from public bodies in their own state but also from institutional or individual donors, another state or multilateral agencies, subject only to the laws generally applicable to customs, foreign exchange and money laundering and those on the funding of elections and political parties.”10

There is no question that NGOs must be held just as accountable under law as any other organizations. However, existing laws can be used to prevent financial misdeeds and to ensure that no group is acting as a front to support human rights abuses by non-state actors. In order to make sure that legitimate NGOs can make their crucial and necessary contribution to the country’s development, India should make it a priority to develop a legal framework which safeguards freedom of association and the right of NGOs to seek and receive funding.

We thus urge you not to place the FCRB to vote. Instead, we urge you to repeal those provisions of the FCRA which do not conform to international standards and potentially undermine the work of nongovernmental organizations.

In India and internationally it is regarded as good practice for governments and legislatures to consult broadly with organizations and constituencies that may be affected by any legal change which affect their existence and activities. In the process of considering the FCRB or revising the FCRA, we hope that a broad consultation, including with independent and critical individuals and groups, will take place.

Mr. Prime Minister, over the years India’s FCRA has at best been a nuisance for legitimate nongovernmental organizations and at worst a tool to harass those that have been critical of certain policies, practices, and interests of the government of the day. In its present form, the FCRB will further exacerbate these problems.

Both the existing Act and the proposed Bill are in clear breach of international human rights law and other international standards. Instead of being in the company of other democracies, the FCRA and FCRB leave the world’s largest democracy in the company of a number of autocratic states well known for their restrictive policies towards nongovernmental organizations and for their poor respect for freedom of association.

Yours sincerely,

Brad Adams

Executive Director


1. Ministry of Home Affairs, Receipt of Foreign Contribution by Voluntary Associations: FCRA Annual Report 2005-2006, http://www.mha.nic.in/fcra.htm (accessed 27 March, 2008).

2. Art. 19 and 20.

3. Art. 19 and 22.

4. Art. 19.

5. Ministry of Home Affairs, Common Grounds for Rejection of Application under FCRA, http://www.mha.nic.in/fcra/intro/rejection_grounds.pdf (accessed March 28, 2008).

6. Ministry of Home Affairs, Introduction to FCRA, http://www.mha.nic.in/fcra/intro/introduction.htm (accessed March 28, 2008).

7. Planning Commission, Government of India, National Policy on the Voluntary Sector, May 2007.

8. Art. 13, Declaration on the Right and Responsibility of Individuals, Groups and Organs of Society to Promote and Protect Universally Recognized Human Rights and Fundamental Freedoms, A/RES/53/144.

9. Office of the United Nations High Commissioner for Human Rights, Human Rights Defenders: Protecting the Right to Defend Human Rights, Human Rights Fact Sheet 29, page 29 and 30, http://www.ohchr.org/Documents/Publications/FactSheet29en.pdf (accessed March 27, 2008).

10. Recommendation CM/Rec (2007) 14 of the Committee of Ministers to member states on the Legal Status of Non-Governmental Organisations in Europe, https://wcd.coe.int/ViewDoc.jsp?id=1194609&Site=CM&BackColorInternet=999... (accessed March 27, 2008).