Scholars Explore the Impact of Regulatory Constraints on NGOs

Newsreel Asia Insight #95
Jan. 06, 2024

Two scholars from Germany’s Heidelberg University say their study has found that civil society organisations in India, particularly those championing the rights of minorities, Dalits and Adivasis, are facing intensified state scrutiny and regulatory constraints, a situation resulting in a marked narrowing of the civic space within the country.

The academics, Rahul Mukherji and Aditya Shrivastava, conducted a detailed examination of the state’s use of diverse methods to restrict the activities of 15 big and smaller organisations, and documented the findings of their study in an op-ed published in The Hindu.

Some of these organisations rely on domestic donations, while others depend on foreign contributions. They include Amnesty International, the Centre for Equity Studies, Citizens for Justice and Peace, Lawyers Collective, Centre for Promotion of Social Concerns, Oxfam, Navsarjan, Save The Children and Act Now for Harmony and Democracy, or ANHAD.

These groups play a crucial role in holding the government accountable and ensuring that minority rights are not just upheld but actively protected, according to the study, which suggests they are facing stringent legal and financial challenges.

In September 2023, two scholars from the Maharashtra Institute of Technology (MIT), Chinmay Bendre and Neelam Pandit, unveiled their study on India’s civil society groups, with the findings published in The Leaflet, which stated that the groups “frequently encounter slander, coercion and even criminalisation when they attempt to address matters of political, economic or environmental significance.”

They cited two reasons: “First, the rise of non-State actors; and second, a sharp decline in the standards of media ethics, erosion of academic freedoms and a noticeable fall in the effectiveness of legislative bodies.”

The latest study, by Mukherji and Shrivastava, indicates that some groups have exhausted their funds, while the leaders of other organisations have either been imprisoned or are facing charges that could lead to incarceration. Some have seen their activities drastically curtailed due to repeated state interventions. Consequently, the civic space has contracted significantly, affecting even organisations that do not oppose communalism.

According to the scholars, the primary instruments used against civil society groups are the Prevention of Money Laundering Act, 2002, and the Foreign Contribution (Regulation) Act, 2010 (FCRA). Their analysis deliberately excludes the Unlawful Activities (Prevention) Act, focusing instead on actions predominantly impacting NGOs.

Between 2015 and 2022, about 18,000 organisations lost their right to access foreign funds, the study says.

Sections 12A and 80G of the Income-Tax Act offer tax exemptions to NGOs and their donors, respectively, the study notes, adding that the renewal of these certificates is now mandatory every five years, and NGOs must disclose donor details, including PAN card numbers, to the Ministry of Finance. The scholars suggest that these provisions allow the state to “intimidate domestic donors who wish to fight communalism and crony capitalism.”

The state also uses “income-tax surveys as a way of collecting data that can be used to further escalate and institute more cases either by the CBI (Central Bureau of Investigation) or the Tax Department.”

Civil society organisations are often the first line of defence for marginalised communities, providing a platform for their voices and concerns. They play a crucial role in holding the government accountable and ensuring that minority rights are not just upheld but actively protected, the scholars say, pointing out that the diminishing space for these organisations thus directly impacts these communities, leaving them more vulnerable and less heard.

Moreover, the targeting of NGOs, especially those involved in human rights and social justice, signals a reduction in the checks and balances essential in any democratic setup, the scholars say.

In rural areas, where state presence is sometimes minimal, NGOs step in to address issues like land rights and environmental protection. Their constrained operations mean these communities are now less equipped to navigate the complexities of state and corporate interests, directly affecting their livelihood and rights.

The suspicion cast on NGOs, particularly those receiving foreign funding, creates an environment of mistrust around their activities. This suspicion leads to a chilling effect, where organisations might self-censor or limit their activities to avoid state scrutiny.

The impact here is two-fold: it not only reduces the effectiveness of these organisations but also erodes public trust in them. In a country with uneven public services, NGOs often fill critical gaps, providing education, healthcare and legal aid. A decline in their operations directly affects the availability and quality of these essential services to the general populace.

However, despite these challenges, many organisations persist in working within these constraints, supporting vulnerable communities.