E-Paper
SC: Parliament can stop NGOs from receiving foreign funds
While NGOs earlier could use up to 50% funds for administrative use, the new amendment restricted this use to 20%.
Parliament can prevent non-governmental organisations (NGOs) from receiving foreign donations as “no right inheres in the citizen to receive foreign contributions”, the Supreme Court said on Friday.
Upholding the amendments in the Foreign Contribution (Regulation) Act (FCRA), 2010, a three-judge bench headed by justice AM Khanwilkar said foreign aid ought to be kept at the minimum level as it can have a material impact on matters of the socioeconomic structure and polity of the country.
“Foreign contribution can have material impact in the matter of socioeconomic structure and polity of the country. The foreign aid can create the presence of a foreign contributor and influence the policies of the country. It may tend to influence or impose political ideology. Such being the expanse of the effect of foreign contribution coupled with the tenet of constitutional morality of the nation, the presence or inflow of foreign contribution in the country ought to be at the minimum level, if not completely eschewed,” the bench, also comprising justices Dinesh Maheshwari and CT Ravikumar, said.
There is no dearth of donors in the country, the court said. “The charitable associations may instead focus on donors within the country, to obviate influence of foreign countries owing to foreign contribution.”
Parliament passed a bill on September 23 last year to amend the FCRA to make furnishing of Aadhaar numbers by office-bearers of NGOs mandatory for registration, with the government asserting that the proposed legislation is aimed at transparency and not against any NGO.
The amendments also required all foreign contributions to be received in a bank account opened with the State Bank of India’s main branch in the national capital. The money received by an outfit cannot be transferred to any other person or organisation (Section 7) and has to be spent for the specified purpose for which it was sent.
While NGOs earlier could use up to 50% funds for administrative use, the new amendment restricted this use to 20%.
The amendments came into effect on September 29.
The top court on Friday pronounced its judgment on a batch of pleas by a few NGOs, which claimed the amendments were arbitrary and discriminatory in nature. The restraint on transfer of funds to other organisations and individuals is a violation of their fundamental rights under Article 19 of the Constitution to form associations and practise their profession freely, the petitioners said.
Appearing for the Centre, solicitor general Tushar Mehta said the amendments aim to keep a check on the sudden rise in transfers of foreign contribution into multiple accounts that could not be scrutinised. Some NGOs are primarily involved in routing of foreign contributions to other organisations, thereby causing operational difficulties and malpractices that threaten to defeat the very purpose of the 2010 Act, he added.
The inflow of foreign contribution had almost doubled between 2010 and 2019 and the government had to cancel registrations of over 19,000 NGOs that failed to comply with basic statutory formalities under the Act, the Centre said.
The bench found this figure “staggering”. “It is open to the State to have a regime which may completely prohibit receipt of foreign donation, as no right inheres in the citizen to receive foreign contribution (donation),” it said.
Parliament, in its wisdom, has the prerogative to introduce changes for the betterment of governance, the court added. “The strict regime had become essential because of the past experience of abuse and misutilisation of the ‘foreign contribution’ and cancellation of certificates of as many as 19,000 registered organisations on the ground of being grossly non-compliant.”
