The onset of the coronavirus outbreak in the country has reportedly spelt doom for many Non-Governmental Organisations (NGOs) as they are witnessing a steady plunge in their already dwindling donations, ss per a report in The Hindu Businessline. While a calamity, especially of the magnitude of coronavirus would have generally garnered outsize monetary contributions for the NGOs, however, the benefits of donating to PM CARES Fund has driven a huge chunk of contributions away from these non-profit organisations.
PM CARES favoured over traditional NGOs
The report states that the NGOs in India are struggling under the long economic shadow of coronavirus. They are facing stiff headwinds from the PM CARES Fund whose inherent advantages are providing donators with enough motives to side with it. Almost all big donations for meeting the emergency have gone to the PM CARES Fund, partly because of its wide publicity and largely because of the 100 per cent tax exemptions allowed for the donations. Those donating to the NGOs stand eligible only for 50 per cent of tax deduction. This has been a powerful reason for many, small and big donators, to contribute solely to the PM CARES Fund.
The launch of the PM CARES Fund has posed a serious challenge to the existing NGOs. The NGOs believe that the ace business magnates in the country would be more inclined to donate towards the PM CARES Fund, considering the appeal made by the Prime Minister and the extensive publicity of the PM CARES Fund. In such a scenario, the NGOs fear that the business leaders would increase their share of donations towards the Prime Minister’s Fund and cut back on the contributions made to the NGOs.
The Bisinessline report also states that the contributions received by the NGOs as a part of CSR activities of organisations have also drastically reduced after the government amended the CSR guidelines, allowing the organisations to treat their donations to PM CARES Fund as a part of their mandatory 2 per cent CSR contribution under the Companies Act. Funds worth Rs 7000 crore which would have otherwise gone to NGOs have been donated to the PM CARES Fund as CSR contribution.
Crackdown on foreign funding
Ever since the Modi government came into power in 2014, there has been a focused attempt to turn off the foreign aid tap to the NGOs owing to the dubious source of the funding and their underlying agenda for pumping money into the country to achieve political goals.
The Narendra Modi government, soon after coming to power, began a process of scrutinizing foreign-funded NGOs in the country. The government has followed a meticulous process when it comes to FCRA rules compliance. A report by CBI in 2015, had revealed that there are more than 31 lakh NGOs operating in the country which received their funds either from the government or from abroad, only a paltry 10% had filed their balance sheet.
Since coming to power in 2014, the Modi government has come down hard against the shady NGOs who have been receiving illicit foreign funding to carry out their nefarious designs in India. Under the Modi government, nearly 18,000 NGOs which were found to be violating the various clauses of the Foreign Contribution (Regulation) Act were stripped of their permission to receive foreign funding.
An analysis of the FCRA data indicates that as on 1st April 2017 the total amount brought forward by the FCRA-NGOs as unspent money from past foreign ‘donations’ is a whopping Rs. 15,907 Crores, more than 50% of which is lying with about 2% of the FCRA-NGOs. As a result of the clampdown by the Modi government against the NGOs, a staggering 40 per cent decline was witnessed in funding from foreign sources in the year 2017-2018 from the levels of external funding recorded in 2014.