Q.) Explain why the latest amendments to the Foreign Contribution (Regulation) Amendment Act, 2020 (FCRA) are causing concern in India’s development sector. (10mark) (150 words)

The Government recently passed the Foreign Contribution (Regulation) Amendment Act, 2020 (FCRA) on the grounds that foreign-aided NGOs actively stall development projects and negatively influence economic progress.

Concerns for the development sector in India: 

  • The Amendment Act stops a lot of people who are good for the community from doing things that help the public and need money from other countries.
  • The Act hurts collaboration and networking between big NGOs, foreign NGOs, and small NGOs and social workers, which hurts grassroots development.
  • The Act could silence critical voices by declaring them to be against the public interest, which would stop the culture of dissent, debate, and deliberation.
  • There may be logistical problems and hurdles for NGOs when more money from outside the country comes into one bank. This could make it more difficult for them to do business.
  • By cutting administrative costs, the amendment hurts the lives of people in the social sector who are already underpaid.

However, the government says that these changes are meant to be more transparent, accountable, and to stop the misuse of foreign funds. As a result of this, there is a need for an independent regulator to keep an eye on what civil society and philanthropy do. Further, an online fund-raising platform, like a social stock exchange, can be made. A good balance must be found between the purpose of the law and how the voluntary sector works in order to keep the law from being interpreted in a way that could lead to it being misused.

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