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FCRA Bill 2020: Disallowing Re-granting Between FCRA Compliant Organisation Will Cut Short India’s Development Story

The FCRA Bill 2020 that will be tabled in Rajya Sabha this week aims to make the non-profit sector more compliant and prevent any misappropriation of funds. As a grant-making organisation, it has been our mission to ensure that grants are utilised efficiently in a transparent manner. However, we would like to draw the attention of the government to one particular clause that disallows transfers between FCRA compliant organisations (re-granting).
Re-granting, through Indian entities, helps in better management of funds, more accountability, curtails misappropriation of funds and helps achieve greater impact on the ground. Grant-making serves as a real enabler for most mid to small size NGOs. The clause, once implemented will curtail the funds of many grant-making organisations along with other FCRA-compliant grassroots organisations.
Grassroots organisations, with their ear to the ground have been the real mover-shakers in terms of furthering India’s development agenda at the local and hyperlocal levels. We have seen how NGOs worked selflessly during the COVID-19 lockdown. Now as the country gears up to recover from the socio-economic setbacks brought about by the pandemic, NGOs will be instrumental in addressing challenges at local and hyperlocal levels. The abovementioned clause will clip their wings and disallow them to continue with their good work.
Grassroots organizations are already starved for resources and find the much-needed support through the process of sub granting. Restricting re-granting and drastically reducing admin costs can affect many critical services for poor along with millions of jobs in the NGO sector.
The government must encourage the flow of foreign funds, especially from the Indian diaspora. It not only brings in more money into the social sector, but also creates a pathway for knowledge, technological know-how and skills, which will help in addressing poverty and reducing inequalities –issues that are crucial for achieving the sustainable development goals set by the United Nations.
Through our comprehensive validation programme, we chose the most credible and compliant NGOs to implement developmental programmes.  For over two decades, we have seen how re-granting has helped in curtailing misappropriation and efficient utilisation of funds, ensuring a positive impact on the lives of people, their communities and environment. It enables a robust system for monitoring, planning and improving projects that feed into the country’s development story.
The government should consider leveraging the strength of the re-granting model rather than removing it. We would urge the government to look at the positives of re-granting and remove the abovementioned clause from the FCRA Bill 2020.
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