M A I N   N E W S

LS plugs forex flow for religious conversions
Clears law to regulate money coming from abroad
Aditi Tandon
Tribune News Service

New Delhi, August 27
Organisations of political nature and those involved in religious conversions will henceforth be barred from accepting foreign funds. Also, persons holding political positions like MPs and MLAs can no longer enjoy foreign hospitality and must intimate the government of their visits abroad, personal or official.

After letting private organisations bring in unaccounted foreign remittances for 34 years, the government today brought to the Lok Sabha the Foreign Contribution Regulation Bill, 2010, to regulate the acceptance and utilisation of foreign contribution of hospitality by certain individuals or associations and to prohibit such acceptances for activities detrimental to national interest. The Lower House passed the Bill, which the Rajya Sabha has already cleared.

At the root of the law is the concern that out of 40, 173 NGOs (in 1993 there were just 1,500) accepting foreign funding, only 18,796 have submitted their audited accounts. For the rest, the government doesn’t know the source of funding.

So far, Rs 12,000 crore has “officially” come through the foreign route, of which 60 per cent has come from religious organisations, some from countries as small in population as Canada, Mauritius and Luxembourg.

The government’s data shows that in 2005 and 2006, there were over 32,144 organisations taking foreign funds in India. Only 18,000 declared their funding. In 2005-2006, of the Rs 7,000 crore that came from foreign sources, Rs 3,075 crore came for religious organisations. This explains why the new law (which replaces the 1976 legislation) bans foreign funds for conversion purposes.

Already in the North-East and tribal Orissa, Madhya Pradesh and Bihar, conversion has caused severe communal tensions —- the latest being Hindu-Christian riots in Orissa’s Kandhamal district, where the Christian population has increased considerably in the past three decades. Today in the Lok Sabha, Kandhamal MP Rudra Madhab Ray stood with others to seek a ban on foreign funds inflow for conversions.

Significant amounts (to the tune of Rs 7,229 crore) have also come in for education, with no monitoring. In the run-up to the new FCR Bill 2010, the government banned 41 outfits from taking foreign remittances; sealed accounts of 11 and asked 45 to take permission first. MPs led by JDU, however, wanted the government to declare the names of these organisations.

With the new law, the government has capped administrative expenses at 50 per cent of all inflows to NGOs (India has about 20 lakh). “So far there was no such cap,” Minister of State for Home Ajay Maken said, accepting that out of 40,000 registered organisations for foreign contributions, 18,000 had declared accounts while 22,000 were dormant and needed to be phased out.

Henceforth, banks depositing foreign funds would need to tell the government of any deposits exceeding Rs 10 lakh at any time. “We must track heavy inflows as the law barns use of funds for speculative purposes,” Maken said.

The government will define “organisations of political nature” in the rules it frames for the law. It will now have complete authority to decide which person or persons can accept foreign money, the purpose for which they can accept it, the source wherefrom it comes and the areas for which it can come.