Foreign funding of NGOs should stop

FREE PRESS Journal, Feb 01, 2012 PROF.R. VAIDYANATHAN

Two important criteria for NGOs are that they should be independent from government and they are organizations not meant for making profit. But many get money from the government or from foreign governments. The type of activities they are involved is mind- boggling which can extent from " aging issues" to " corruption" to " human rights" to " waste management". Many of them call themselves " Civil Society" and involve in socio- political activities even though they do not directly participate in the electoral process. Many of Church- related organizations involve themselves in human rights issues as a civil society organization. They are also active in conversion or what is called harvesting of souls. The funding for many of these civil society groups is substantially international. The international flow of funds is regulated by the Foreign Contributions Regulation Act ( FCRA Act) of the Central Government on which the ministry of home affairs has formulated rules in April 2011 onwards.

In the nine years from 2001 to 2010 such organizations received more than Rs 70,000 crore and in 2009- 10 ( for which latest data is available) it was Rs 10,400 crore. The total number of such organizations was 38,500 in 2009- 10 and of them only 21,500 ( 55%) reported their accounts. The list of donor countries is headed by the US ( Rs 3,105 crore) followed by Germany ( Rs 1, 046 crore) and the UK ( Rs 1, 039crore). The highest amount of foreign contribution was received and utilized for establishment expenses ( Rs 1,483 crore), followed by rural development ( Rs 944 crore) etc. Establishment expenses consist of buying land, buildings, jeeps, setting up offices, mobiles, laptops, cameras, salaries, consultancy fees, honorarium, and foreign travel etc, constituting nearly 50% of the expenses and in some cases as high as 70%. This goes against the grain of service motto where the ultimate recipient is supposed to get the maximum. Now, such organizations even recruit " executives" from management institutions. However, they are not covered by Right to Information Act as they are not part of government. Many do not have any information on their web sites. Some of the web sites contain nothing on finances. They demand transparency from others. World Vision of Tamil Nadu is one organization which has got maximum foreign funds Rs 209 crore in the last year alone. If you consider last five years it has got nearly Rs 1,000 crore. In the US, this organization employs only Christians and the US Supreme Court has upheld this. Its parent says that " More than 80 percent of staff members worldwide are Christians. In each of the 100 countries where World Vision works our leadership is Christian". World Vision is a sectarian Christian organization which says " maintaining Christian identity is critical for the staff. " It is supposed to clarify in every communication about their Christian identity but hardly done in India. Why such sectarian organizations allowed to flourish using foreign funds? The primary purpose of most of these sectarian organizations is conversion or harvesting the soul. This has given rise to social tensions in several parts of India. That there are other issues pertaining to illegal flows. The International Narcotics Control Strategy Report - Money Laundering and Financial Crimes ( March 2009) - by the US State Department suggests that 30- 40 per cent of the inflows may be through hawala channels which are not accounted. During 2007- 2008, according to this report, formal inflows into India were $ 42.6 billion. So 40 per cent of this amount, $ 16- 18 billion, could be considered illegal flows not captured by law. Recently the Government included NGOs and other trusts also within the ambit of Prevention of Money Laundering Act ( PMLA) 2002, by a notification. But we do not find any known action so far against NGOs under the PMLA. Not only that due to the foreign funding the issues taken up are as per masters choice. Suddenly Gates Foundation finds HIV as the issue in our country while we are still battling TB and leprosy and malaria. Agenda- driven funding undermines our priorities and perspectives. Recently Russia has approved a bill that introduces stringent control over the activities of foreign funded non- government and non- commercial organizations in a move designed to pre- empt any " coloured revolution" in the country.

It says, and to quote " The Kremlin has learnt its lessons from a string of " coloured revolutions" in the former Soviet Republics - the " rose revolution in Georgia, the " orange revolution" in Ukraine and the " tulip revolution" in Kyrgyzstan - all inspired and orchestrated by westernfunded civil society groups". Incidentally, there is an act in the US called Foreign Agents Registration Act ( FARA) and it provides for penalties up to ten years in jail for acting as a foreign agent or getting foreign funds without notification to the Attorney General. FARA was originally passed in 1938 to prevent the spread of Nazi ideas and propaganda. It is important that the Government of India bans foreign funding of civil society groups and NGOs who want to reform India. For this, the Government should scrap the FCRA act and also the rules. Let NGOs and other missionary activities take place using local charity. We are no more the " white mans burden". The author is professor of Finance and Control, Indian Institute of Management, Bangalore.