That seventies feeling

The government is returning to a 1970s mentality. This mentality used a presumptive distrust of citizens as an excuse for enhancing state power. It sought accountability, not through intelligently designed transparency norms, but greater discretionary power in state officials. And finally, it sought to curb citizens' freedoms, not by directly assaulting them, but by embedding them in a structure of regulation that deters free expression.

This mentality connects three recent sets of regulations that directly impact civil society. India's FCRA (Foreign Contributions Regulation Act) was always a source of great discretionary power for the state. But the new legislation is even more draconian. It takes away the existing provisions that institutions can, after due scrutiny, get permanent FCRA accounts, subject to various reporting requirements. All institutions will now have to reapply every five years. In addition, the granting of these permissions is subject to broad discretionary power by lower levels of the state.

The proposed Direct Tax Code is, to put it mildly, uncharitable to charities. It restrictively narrows the definition of what counts as charitable activity. It taxes charities on the basis of an absurd method of cash accounting. It is premised on the bizarre assumption of the Shome committee that any organisation that raises revenue cannot be charitable or contribute to public purpose. It will severely affect the vibrancy of the not-for-profit sector. The new Internet rules threaten free expression. They will arbitrarily enhance state power.

These proposals are nothing but an insidious tightening of the noose around civil society. Each requires detailed analysis. But it is the broad premises behind them that require deconstruction.

The first premise is an outdated conception of accountability. No one denies that not-for-profits or institutions receiving foreign funds need to be held broadly accountable. The government already has all the powers it needs. But it cloaks up its implementation failures by enacting new laws. The simplest way of ensuring accountability is well-designed reporting requirements, and making accounts of charities and not-for-profits public, instead of making them subject to the continuous discretion of state officials. Such horizontal accountability would be far more efficient and fair than asking groups to continually seek permission. There are over three million civil society groups. As it is, the state cannot cope with demands for renewing a whole series of approvals; renewing tax-exempt status can take years. Instead of transparency, what the state will end up promoting is its own discretionary powers, an increase of workload that will defeat the purpose of proper regulation and produce greater uncertainty for civil society. And this they call reform.

The second premise is this. What the right hand of government does, the left hand will undo. On one hand the government is saying to institutions: "Increase your revenue. Don't be too dependent on the state. Financial autonomy is the key to institutional autonomy." On the other hand, the finance ministry is saying: "If you are good at raising money, we will come take it away. We don't want institutions that serve public purposes exempt from taxes. And we don't want tax regimes that can allow not-for profits to do long-term planning." We want a vibrant not-for-profit space, but we will do our best to ensure that life is difficult for the sector.

The third premise is the politics of fear. Behind the FCRA regulations there was a motley and contradictory crew: Hindu nationalists who thought Christian missionaries can be regulated; Congress types who thought Hindu nationalist charities could be regulated; bureaucrats who thought state power is good; fear-mongers who raised the bogey of Islamic terrorism. But in the debate the basic question that was not answered was this: does the new regulation actually help you achieve objectives? In an era where private companies can freely move money, no national security purpose is served by subjecting not-for profit institutions to the bureaucratic treadmill.

The fourth premise is the bogey of foreign influence. As far as funding genuine research in the not-for-profit sector is concerned, Indian capital has simply not stepped up to the plate. It usually comes with more strings attached than a professional foreign foundation. It is an unpleasant truth, but a lot of the professional infrastructure of research in India, whether in agriculture or social sciences, is largely due to professionally run foreign foundations. Sure, there is some unsavoury funding that comes in as well. But the implicit fear that foreigners will buy out our benighted citizens expresses a 1970s-style paranoia; it is a throwback to the days of FERA and worries about the CIA.

The fifth premise is fear of ideas. The government will give companies freedoms it will not give civil society organisations. It is a scandal that a democratic society requires its institutions to seek permission from government to organise international conferences. It is a scandal that companies can hire anyone they want, but researchers have to go through intelligence vetting. If you want a vignette about how comically absurd the government is about research, just look at a PIO card. This card was meant to make life easy for overseas Indians. But at the back it says PIOs are prohibited from two activities: research and mountaineering. Go figure.

The sixth premise is a contempt for freedom. In a world where states are using any pretext to curb hard-won liberal freedoms, India should project itself as a society that is passionately committed to freedom and a vibrant civil society. Instead we are doing the opposite, by trying to emulate authoritarian regimes. The Internet regulations must be subject to detailed scrutiny. But they reveal the mindset at work: give the state broad powers through vaguely defined provisions. Its definition of "objectionable content" is too vague. Courts may eventually subject this definition to some objective standards. But regulations change the presumption of a free society. You have to now prove your innocence to be able to exercise your right to free expression. The state has not overtly attacked free expression; instead it has insidiously embedded it in an institutional architecture that will act as a deterrent.

In a free society, when a hundred flowers bloom, weeds will flourish as well. But the weeds have become a pretext to kill the soil in which these flowers bloom. The fundamental premise of a reformist government is a belief in freedom. This government is turning its back on that belief.

Full disclosure: The author heads a not-for-profit research institution, that receives FCRA contributions (in addition to funds from the ICSSR), and has a stake in a free society.

The writer is president, Centre for Policy Research, Delhi

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