The Supreme Court upheld modifications to the Foreign Contribution Regulation Act (FCRA) imposing limits on Friday, ruling that no one has a fundamental or absolute right to receive foreign contributions. The Supreme court reasoned that an unrestrained stream of foreign donations might destabilize the nation’s sovereignty, which could affect non-governmental organizations (NGOs) working at the grassroots level with no direct link to foreign funders.
The limits include a prohibition on receiving foreign contributions through operating FCRA accounts, as well as the requirement to produce an Aadhaar card for FCRA registration. They require NGOs and receivers to register a new FCRA account as a “one-point entry” for international donations at a specific branch of the State Bank of India in New Delhi.
The petitioners, who included people and non-governmental organizations (NGOs) involved in cultural, educational, and religious activities, claimed that the modifications breached their fundamental rights due to “ambiguity, over-breadth, or over-governance.” According to them, the new policy effectively prohibits intermediary organizations in India from distributing foreign donations to smaller, less visible NGOs.
‘Strict regulatory framework’, Supreme Court Noted
The reforms, however, merely create a stringent regulatory framework to regulate the entrance of foreign cash into the country, according to the Supreme court. “No one can be heard to claim a vested right to receive foreign donations, much less an absolute right,” Justice A.M. Khanwilkar, who authored the ruling, remarked. The unregulated entry of foreign capital has the potential to have an impact on the country’s socioeconomic structure and polity.
“From a philosophical standpoint, foreign contribution (gift) is a pleasurable intoxication with medicinal characteristics that may function similarly to nectar. It can, however, be used as medication if it is eaten (used) in moderation and discreetly for the greater good of humanity. Otherwise, as with the toxic drug (powerful instrument), this artifice has the capability of inflicting agony, misery, and unrest across the nation,” Justice Khanwilkar concluded in a 132-page verdict.
‘Look within the country’
The charity could be discovered at home, according to the Supreme court. NGOs could look for funding within the country. “The presence/inflow of foreign contribution in the country should be kept to a bare minimum, if not entirely avoided.” The effect could emerge in a variety of ways, including disrupting the country’s social order,” it said. Fundamental liberties must give way to the necessity to protect the democratic system from the “adverse influence of foreign contributions” in the greater public interest.
“Though third-world countries may welcome foreign donations, a nation that is committed and enduring to being self-reliant and variously capable of shouldering its own needs may opt for a policy of complete prohibition of inflow/acceptance of foreign contribution (donation) from a foreign source,” the court stated. According to Justice Khanwilkar, the uncontrolled infusion of foreign donations simply shows that the government is incapable of looking after its own issues and the needs of its inhabitants.
The Supreme court stated that under the FCRA, 19,000 certificates of registration were revoked due to statutory violations. Between 2010 and 2019, the annual inflow of foreign contributions nearly doubled. A flurry of criminal investigations erupted. Donations were being redirected. Despite the “strong system” in place since 2010, it was impossible to identify the flow and eventual use of foreign donations due to successive transfers and the building of a layered trail of money.
“The changes are a regulatory measure to authorize acceptance by registered persons or persons having prior permission to do so with the caveat that they must use the entire contribution themselves,” Justice Khanwilkar noted.
‘Continuous Supervision’
The Supreme court ruled that the amendments’ restrictions were “fair” and “based on understandable criteria.” It strengthened the efficacy of “continual oversight” over foreign contributions, did not discriminate, and served the FCRA 2010’s aim.
“A simple complaint of annoyance is insufficient to elicit constitutional prohibition… “There is inherent evidence that the amendments’ effect is to serve a legitimate government objective and has a reasonable nexus to the intention of the primary Act of 2010,” Justice Khanwilkar said.
The court, however, struck down one of the clauses of the 2020 Amendment Act, Section 12 (A), which required the production of Aadhaar cards for registration. The Court permitted NGOs’ officers to use their Indian passports as identification documents.