Sunday, 19 September 2021

FCRA Direct Foreign Fund Inflows over the Years: Where is the money coming into?



FCRA Direct Foreign Fund Inflows over the Years: Where is the money coming into?

Introduction

Our previous post presented the total direct foreign fund inflow into Indian FCRA-NGOs during the period 1995-2018. That post had a limitation, as it had to depend on other sources for estimates of inflows during the years 2013-14 and 2014-15. The current Post removes this limitation. Thus, all numbers published here, from 2006, are results of our own numbers, which can (in principle) be verified by anyone using FCRA returns publicly available at fcraonline.nic.in.

The current Post also dissects the foreign fund inflows into States. Where does all this money go? Which are the important states? Or, to borrow the language of psephologists, are there bellweather states which correlate with the total foreign fund inflow? How does the inflow into these States change over time? We present this analysis as well for the period 2006-2018, here. The current analysis also unravels a likely reason for the Ministry of Home Affairs to prohibit secondary transfer of Foreign Contribution (FC) (also referred to as ‘sub-granting’ by mega Indian FCRA-NGOs) in its FCRA Amendments of 2020.

Why are we looking at Direct Foreign Fund Inflows here, rather than the total FC (which includes Interest amounts as well) of FCRA-NGOs? We shall of course post our analyses of Interest Amounts in future (see our Old Post which unravelled this cash hoard), but we should not lose sight of the important fact that FCRA exists not to facilitate India’s FCRA-NGOs, but rather to facilitate the expiation of guilt (of all kinds) of foreign ‘charities’. Thus, we need to see how ‘they’ gaze us.

Rest of the Post is via a Table and Five Figures, followed by our Observations. Please read in full. Thanks.

Table 1: Direct Foreign Contribution (FC) to India’s FCRA-NGOs [These amounts are the total annual outgo from the foreign donors. They do not include Interest amounts from Bank. They also do not include amounts by way of secondary transfers, i.e., intra-India FC transfers].

Year

Total Foreign Funds Inflow via FCRA [Rs. Crore]

Number of FCRA-NGOs which filed returns

1995

2169


1996

2572


1997

2865


1998

3403


1999

3925


2000

4535


2001

4871


2002

5047


2003

5105


2004

5257


2005

7877


2006

9584

21949

2007

8465

21675

2008

9495

23234

2009

8959

22042

2010

9287

24611

2011

10520

25051

2012

11179

25095

2013

12920

25152

2014

14325

25064

2015

17744

24375

2016

15046

23904

2017

16874

23751

2018

16464

22214

In Figure 1, we present the data of Table 1, as a Graph.

Figure 1




Figure 2: Foreign Fund Inflows Directly from Abroad to FCRA-NGOs registered in Eight Important States.

Figure 3: Same data as in Figure 2, but data for Delhi is not shown here so that the trends exhibited by other States can be seen easily.

Figure 4: Percentage of Total Direct Foreign Fund Inflow to FCRA-NGOs registered in various States (normalized to the total all-India inflow for the corresponding year).

Figure 5: Total number of FCRA-NGOs for two important States: Delhi and Tamil Nadu

Observations:

  1. The sharp rise in Figure 1 seen for the year 2015, is due to the large increase to four Kerala FCRA-NGOs (whose FCRA registrations have since been cancelled), brought about by the legal troubles faced by their ‘Donor’ entity’s USA. Another contributor to this rise is by an entity in Delhi. The same was discussed by us earlier (see Section 2.a of this Post).

  2. FCRA-NGOs registered in Eight States (out of the total of 36 States/UTs in India) alone receive 81% of the total Direct Foreign Contributions, each year (see Figure 2). These are : Delhi (DL), Tamil Nadu (TN), Karnataka (KA), Kerala (KL), Maharashtra (MH), Andhra Pradesh (AP), Telangana (TS) and West Bengal (WB). The data for the same is shown in Figure 2. Note the similarity in the trend for Delhi and that for all-India, particularly since 2010, and the steady rise in its inflows. Note also that FCRA-NGOs in Delhi do not spend all their money in Delhi itself. Rather, they are known to do secondary transfers to other FCRA-NGOs across India (post their requirements for administrative expense and their Corpus accumulation). Of these eight, two States stand out. These are: Delhi and Tamil Nadu. Together, these two States alone receive 40% of all-India FCRA Direct Foreign Fund Inflows. Thus, any policy change on FCRA has to target the utilisation of FC in these two States. To a large extent, the recent Amendments to FCRA (prohibiting intra-India FC transfer to other FCRA-NGOs) will reduce the bloating of Delhi’s FCRA-NGOs, which portends well for the well-being of India.

Given the predominantly non-religious (i.e., explicitly non-religious) nature of Delhi’s FCRA-NGOs, and given that they are largely into work on various ‘Rights’, we beleive that the big increase in FCRA inflows into them since 2012 is a well-thought out strategem of Global Forces operating behind the rubric of ‘Rights’ in order to usher political changes in our Nation.

  1. Figure 3 is the same as Figure 2, but with the data for Delhi removed so that the trend line for other States can be better seen. Tamil Nadu’s inflows are nearly ‘steady’, hovering between Rs. 1800 Crore and Rs. 2200 Crore per annum, over the last five years. The trends for Karnataka and Maharashtra have been increasing. Although we have an inkling of the character of the inflows to these states, we desist commenting on them, without demonstrable data analysis. Although inflows to both Andhra Pradesh and Telangana are much lesser than that for say, Maharashtra, given their unified nature earlier and given the fact that the combined region is a region-of-interest for one particular Universal Faith, their combined inflows have largely been steady (around Rs. 1800 Crore, p.a.) over the last five years. One may wonder why we have included West Bengal in the list, given that it has received just Rs. 700 Crore p.a. We believe that it is a State which has the potential to become like Kerala in its demography if FCRA is left unchecked.

  2. As mentioned earlier, DL and TN alone contribute to 40% of all-India FCRA kitty. Delhi used to contribute to about 20% in 2006 and since then its inflows have risen sharply, that its contribution to the total FCRA inflow stands at 26.2% in 2018. In contrast, Tamil Nadu’s contribution used to be about 19% in 2006, which has reduced to about 12.5% in 2018. See these trend lines in Figure 4. Contributions of Karnataka and Maharashtra have been showing a steady increase over the last five years and are around 10% each now. Kerala is a mature-FCRA state and its percentage contribution has seen a steady decrease from a lofty 9.3% in 2006 to a lowly 6.7% in 2018. This decrease can be primarily attributed to the growth of rest-of-India’s FCRA inflows, rather than any decrease of inflows to Kerala’s FCRA-NGOs. To reiterate, Kerala is a mature State in both aspects of FCRA – Faith and Rights; thus there is no further room for it to grow in FCRA space.

  3. One may think that the increase in FCRA inflows into Delhi is due to increase in the number of FCRA-NGOs there. This is incorrect, as can be seen from Figure 5 which displays how the number of FCRA-NGOs in Delhi and Tamil Nadu have changed over the years. Since 2010, the number in Delhi is around 1500, while that in Tamil Nadu have been steadily decreasing (the latter is likely due to cancellation of FCRA registrations primarily for non-filing of FC returns). We expect TN’s number of FCRA-NGOs to saturate around 3000 or so.