For the first time, several non-profit entities, backed by foundations and philanthropists abroad, have been asked to give sworn declarations that they would not print or publish news or views on public news.
Foreign donations can only be received by organisations that are registered under the Foreign Contribution (Regulation) Act, 2010 (FCRA), an emergency era law that has been tightened over the years amid fears of misuse.
While applying for a new FCRA licence and reactivating cancelled licences, chief functionaries of a number of non-profits associated with publications, had to sign certain affidavits. The formats of the newly-introduced affidavits, to be attested by a Notary Public, make it virtually impossible to receive foreign contributions in news outlets by interpreting laws differently, said professionals advising many non-governmental organisations (NGOs). It’s a preemptive move by the ministry of home affairs (MHA) to restrain NGOs from mischaracterising ‘media activities’ as ‘education or research’.
NGOs or non-profits can be set up as trusts, or charitable societies, or companies formed under Section 8 of the Companies Act.
BURDEN OF PROOF ON NGOs
Here’s what the three affidavits say:
(1) If an entity under FCRA owns a publication which is registered under The Registrar of Newspapers for India (RNI), it must give an undertaking that the publication “does not contain public news, views, or comments on the public news.” Also, it’s not a ‘newspaper’ in terms of Section 1(1) of The Press and Registration of Books Act (PRB), 1867.
(2) If an entity receiving foreign donations is engaged in printing or publishing a periodical which is not registered with RNI, the organisation must state that the publication does not come under the definition of newspaper as per Section 3(1)(g) of FCRA. This Section states that “no foreign contribution shall be accepted by any association or company engaged in the production or broadcast of audio news or audio-visual news or current affairs programmes through any electronic mode, or any other electronic form..”
(3) The third affidavit relates to non-profits whose memorandum of association (MoA) or trust deed includes printing or publication as an object. Such entities (receiving foreign contributions) must declare that they “will not engage in any publication activity” that is covered under the definition of newspapers as per FCRA. According to Isha Sekhri, partner at Isha Sekhri Advisory LLP, FCRA unequivocally prohibits any association or company engaged in the production or broadcast of audio, audiovisual news, or current affairs programmes – regardless of the medium, whether digital, electronic, or any other form of mass communication – from receiving foreign contributions. “Although there is ongoing interpretational debate regarding the applicability of RNI registration to digital content, FCRA adopts a more expansive scope by incorporating definitions under the Information Technology Act, 2000. The recent introduction of specific affidavit requirements represents a regulatory step toward closing existing compliance gaps, with these changes being implemented right at the threshold level of the registration and approval process itself. It also places clear personal accountability on the chief functionary, marking a shift from procedural formalities to substantive legal adherence,” said Sekhri.
With these affidavits, NGOs engaging in news or views would find it very difficult to claim that their publications are for ‘awareness’, ‘research dissemination’, ‘advocacy’ or ‘community outreach’ – and not ‘news or views’ in the statutory sense; or, avoid RNI registration, and ambiguously label their outputs as newsletters, bulletins, reports, or blogs. Also, entities confined to digital platforms (websites or YouTube channels) cannot escape the glare by claiming they are not ‘newspapers’ as per PRB Act.
By creating a legal paper trail, the move turns the burden of proof on NGOs. The MHA spokesperson did not comment on the subject.
Thus, a media outfit must set up shop abroad to receive foreign donations. For local news media entities, foreign money can come in as minority equity capital subject to government approval.
STERNER NORMS
Senior CA Gautam Shah said FCRA provisions are being made more stringent to avoid any wrong doing. “A check list is being issued to NGOs whose registration were cancelled and are re-applying. Besides affidavits on media ownership, the CA and chief functionaries have to certify activity-wise receipts and payments, as well as income and expenditure accounts. So, NGOs must be careful in ensuring that funds received under FCRA are utilised for the purpose for which the certificate was issued.”
In some cases it could be a challenge for Section 8 companies following the accrual system under mercantile accounting to generate activity wise actual receipt and payment records. Under the new rules which became effective from January 2025, CAs, whose email address and few other details must be shared, have to certify whether NGOs they audit have violated any FCRA provisions.
Content Source: economictimes.indiatimes.com