With the support of foreign foundations and philanthropists, the first time they will not print or publish news or opinions on public news.
Foreign donations can only be received by organizations registered under the Foreign Donations (Regulations) Act (FCRA), an emergency era law that has been tightened over years due to concerns about abuse.
When applying for a new FCRA license and reactivate the cancellation license, many key staff of nonprofits associated with the publication must sign certain affidavits. Professionals say the format of the newly introduced affidavit is notarized and publicly certified, and it is almost impossible to gain foreign contributions in the news media by interpreting the law in different ways, and advise many non-governmental organizations (NGOS) (NGOS). This is a pre-launch system of the Ministry of the Interior (MHA) that limits NGOs to “media activities” to “education or research.”
A non-governmental organization or non-profit organization may be established as a trust, a charitable society or a company established under section 8 of the Company Act.
The burden of proof of NGOs
Here are what the three affidavits say:
(1) If an entity under the FCRA has a publication registered by the newspaper registrar of India (RNI), a commitment must be provided that the publication “does not contain public news, opinions or comments on public news”. In addition, under Article 1(1) of the Journalism and Registration Act (PRB), this is not a “newspaper”, 1867.
(2) If an entity receiving foreign donations engages in printing or publishing journals that are not registered with RNI, the organization must declare that the publication is not defined as a newspaper as defined in Article 3 (1) (g) of FCRA. This section states: “No association or company shall be accepted by any association or company through any electronic mode or any other spreadsheet.”
(3) The third affidavit Memorandum (MOA) or trust deed in relation to a non-profit organization includes printing or publication as the object. These entities (accepting foreign contributions) must declare that they “will not engage in any publishing activities” that are covered by the FCRA’s definition. According to Isha Sekhri, partner at Isha Sekhri Advisory LLP, the FCRA explicitly prohibits any association or company that engages in the production or broadcast of audio, audio-visual news or current affairs programs, whether in the medium, whether digital, electronic or other medium of large-scale communication, cannot accept diplomatic contributions. “Despite the ongoing interpretative debate on the applicability of RNI registration to digital content, the FCRA adopts a broader scope by incorporating the definition of the Information Technology Act of 2000. The recent introduction of specific affidavit requirements represents regulatory steps to close existing compliance gaps, from which they are implemented and subject to approval to a certain scope of procedural formalities for substantive legal compliance,” Sekhri said.
With these affidavits, it will be difficult for NGOs to engage in news or opinions to claim that their publications are for “awareness,” “research communication,” “advocacy,” or “community advocacy,” rather than “news or opinions” in the legal sense; or, avoid RNI registration and ambiguously mark their output as a newsletter, announcement, report or blog. In addition, entities restricted to digital platforms (websites or YouTube channels) cannot escape glare by claiming that they are not “newspapers” in accordance with the PRB Act.
By creating legal notes, this move shifted the burden of proof from NGOs. A MHA spokesperson did not comment on the topic.
Therefore, media clothing must set up shops abroad to receive foreign donations. For local news media entities, foreign funds can be used as minority equity capital, but require government approval.
Strict norms
Senior CA Gautam Shah said the FCRA regulations have become stricter to avoid any wrong practices. “A checklist is being issued to NGOs, whose registration is cancelled and reapplied. In addition to the affidavit’s ownership of the media, the CA and key staff must also prove the receipts and payments through the activity as well as the income and expenditure accounts. Therefore, the NGO must be careful to ensure that funds obtained under the FCRA, which has been issued, and that funds have obtained the certificate of that certificate.
In some cases, this can be a challenge for the Article 8 company following the accrual system under commercial accounting to generate activity-wise actual receipts and payment records. Under the new rules effective from January 2025, CAS’s email address and few other details must be shared and it must prove whether the NGOs they reviewed violated any FCRA regulations.
