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 Civil society organisations should count on their huge social capital

GS 2    Government Policies & Interventions

In Context

Civil society organisations (CSO) in India encounter novel and enduring obstacles.


About the Civil Society Organizations in India


      • India has a long history of a civil society founded on the principles of daana (gifting) and seva (service) (service).
      • Civil society organisation (CSO) or non-governmental organisation (NGO) refers to groups with a spirit of voluntarism and no profit motives; these organisations have been active in cultural promotion, education, health, and natural disaster assistance.

Data on NGOs:

      • Around 1.5 million NGOs (nonprofit, volunteer citizens’ groups established on a local, national, or international level) are active in India today.
      • A survey done by Society for Participatory Research in Asia reveals that (PRIA),
      • 26.5% of non-governmental organisations engage in religious activities
      • Whereas 21.3% of the population is employed in community and/or social service.
      • About one in five NGOs is engaged in education
      • whereas 17.9% are engaged in sports and cultural activities.
      • Just 6.6% of the population is employed in the health sector.


About Foreign Contribution (Regulation) Act (FCRA)


      •  The Foreign Contribution Regulation Act (FCRA) was implemented in 1976 during the Emergency because to fears that foreign powers were intervening in India’s affairs by funnelling money into the country through independent organisations.
      • In truth, these worries were far earlier; they had been voiced in Parliament as early as 1969.


        • The law sought to regulate foreign donations to individuals and associations so that they functioned in a manner consistent with the values of a sovereign democratic republic.

FCRA regulations for the Civil Society Organizations in India

      • Tighter control:
      • The Foreign Contribution (Regulation) Act was changed by the present government in 2020, granting the government greater control and oversight over the receiving and use of foreign contributions by non-governmental organisations.
      • Designated FCRA account: 
        • All NGOs seeking foreign donations have to open a designated FCRA account at the SBI branch.
        • The NGOs can retain their existing FCRA account in any other bank but it will have to be mandatorily linked to the SBI branch in New Delhi.
      • Only banking channels allowed:
      •  Foreign contributions must be accepted exclusively through banking channels and must be accounted for in accordance with the regulations.
      • OCI or PIO: 
        • Donations are given in Indian rupees by any foreign source including foreigners of Indian origin like OCI or PIO cardholders” should also be treated as foreign contributions.
      • Sovereignty and integrity: 
      • It requires NGOs to provide an assurance that the reception of foreign donations will not jeopardise India’s sovereignty and territorial integrity, influence amicable ties with any foreign state, or upset communal harmony.

Challenges & criticisms

      • Related to FCRA regulations:
        • No voice for NGOs:
        • FCRA rules are criticised for stifling the voice of non-governmental organisations and closing the door on popular global causes such as environmental protection, securing the rights of forest residents, and capacity building for the most marginalised.
        • Institutions that engage in advocacy are most likely to be affected by new laws.
        • Joblessness in SCOs:
        • As a result of the prohibition on sub-granting, tens of thousands of people employed in the social sector, mainly in grassroots organisations, have already lost their jobs.
        • Draining of resources:
        • There are even rumblings that civil society should contest the new legislation together.
        • Many of those who have lost their licences have already depleted their finances and are struggling to pay the outstanding salaries of their personnel, therefore the majority of them are hesitant of continuing this lengthy legal struggle.
        • Challenge of localisation:
      • In the current scenario, localization is the most significant obstacle. The origins of the fight for human rights are deeply anchored in local circumstances. It calls for regional leadership.

Other Challenges:

      • No depiction of vulnerable children:
      • The government has recently cautioned CSOs against utilising representative imagery in fundraising campaigns for development challenges such as malnutrition.
      • The National Council for the Protection of Child Rights (NCPCR) issued a guideline to non-profit organisations prohibiting them from depicting vulnerable children.
      • So, each new directive represents a fresh challenge for civil society.
      • Structural deficiencies:
      • Several CSOs must strengthen their governance structures and policies. Without these institutions, maintaining accountability and ensuring that resources are utilised properly can be challenging.
      • Numerous CSOs lack the knowledge and resources necessary to design and sustain professional management systems.
      • Societal misinterpretations:
        • CSOs often face misconceptions about their role in society. They are the targets of political interference and manipulation, which can limit their ability to operate.


For government:

      • Governments should also recognise that some of its important acts and legislation, such as the Right to Information Act, The Protection of Children from Sexual Offenses Act, and the National Food Security Act, will remain relevant if civil society’s foundations are solid.
      • Any attempt to disrupt civil society will be equated to a weakening of these laws.
      • Any strict measures will also have a negative influence on the monitoring of the implementation of numerous government initiatives, including the Mahatma Gandhi National Rural Employment Guarantee Act, the Pradhan Mantri Awas Yojana, and the Pradhan Mantri Jan Dhan Yojana, among others.

For NGOs:

        • Alternate ways of funding:
        • After the enactment of new FCRA regulations, numerous organisations have already begun focusing on local resource mobilisation (LRM) and corporate sponsorship through corporate social responsibility (CSR).
        • Charitable funding:
        • Collective giving is a form of philanthropy in which groups pool their donations to create larger funding for problem-solving.
        • Utilizing technology:
          • There is increasing awareness that increased use of data and digital technology can make charities stronger and even better at what they do.


Way ahead

      • The road forward entails the collectivization of national-level forums for helping marginalised populations by articulating their demands, empowering their identities or voices, and dismantling the existing structures that have failed in terms of performance and conception.

Daily Mains Question

Civil society organisations (CSO) in India encounter novel and enduring obstacles. Enumerate. Provide suggestions regarding how CSOs can effectively address these challenges.