FCRA licence of Centre for Financial Accountability cancelled, non-profit claims political targeting

The Union home ministry on Wednesday cancelled the Foreign Contribution Regulation Act registration of the parent entity of the non-profit Centre for Financial Accountability, which monitors and analyses the role of financial institutions and their impact on development, human rights, and the environment.

The organisation, however, claimed that it was targeted for its criticism of the Union government.

Registration under the Foreign Contribution (Regulation) Act is mandatory for a non-profit organisation to receive foreign funds. The Centre for Financial Accountability is now ineligible to receive fresh donations from abroad. It also requires the home ministry’s clearance to use existing foreign donations.

The Centre has cited incorrect tax filings for financial years 2017-’18 and 2018-’19 by the non-governmental organisation, among other points.

However, executive director of the organisation Joe Athialy told Scroll that its Foreign Contribution Regulation Act registration was cancelled due to political considerations, rather than any violations.

“We believe that this action was taken on account of our work questioning the government,” Athialy said. He added that the government did not point out the allegedly incorrect tax filings in the past six years and did not give the organisation a chance to correct them.

“Companies do not get shut down if there is an error in filing,” he told Scroll. “They are given a chance to correct it.”

The Centre for Financial Accountability’s executive director argued that central agencies do not carry out such action against organisations that share the Union government’s ideology.

Athialy contended that the action against his organisation was part of a larger pattern of the Union government targeting dissenters and critics.

“This pattern is not just limited to FCRA,” he told Scroll. “The same approach was seen in the Bhima Koregaon case, in which false evidence was planted on [Adivasi rights activist] Stan Swamy. This has also been seen in the way [activist and former Jawaharlal Nehru University student] Umar Khalid has been put in jail [in connection with the 2020 Delhi riots].”

The organisation will have a board meeting next week to decide on any further legal steps, Athialy told Scroll.

The Centre’s action against the institute comes after its recent report on environmental risks posed by the Adani Group in Gujarat’s Kutch.

Another report published by the Centre for Financial Accountability on July 7 had said that authorities in Madhya Pradesh’s Singrauli district were arresting people displaced by an Adani coal mine under pressure from the Adani company.

The Centre for Financial Accountability is a project of non-profit company India Institute for Critical Action Centre in Movement. The organisation had been receiving foreign funds since it was established in 2005.

Between financial year 2016-’17 and 2021-’22, the Foreign Contribution Regulation Act licences of more than 6,600 non-governmental organisations were scrapped, the Centre had told Parliament in December 2022. Nearly 20,700 non-governmental organisations have lost their Foreign Contribution Regulation Act licence in the last 10 years.

Last year, the Union government told Parliament that 13,520 non-governmental organisations registered under the Foreign Contribution Regulation Act had received Rs 55,741.51 crore in foreign contributions between 2019-’20 and 2021-’22.

Also read:

• Home ministry dodges query on cancelling foreign contribution licences of nonprofits

• Everything you need to know about FCRA, the law that regulates foreign donations to NGOs

• Strict action will be taken against NGOs seeking to change country’s demography, says Amit Shah