MUMBAI: Lakshman Yeme saw firsthand what happens when foreign funds are cut off under laws the Indian government says are meant to crack down on corruption but that critics say hurt the poorest most. Yeme works as a doctor at a hospital in Anjanwel in the coastal region of Maharashtra, and for years, he toiled almost alone in a poorly equipped, nearly empty building.

Three years ago, the Bombay Sarvodaya Friendship Centre (BSFC), a Mumbai-based NGO, came to his rescue, building an operating theatre, paying for extra staff and subsidizing surgeries. But BSFC’s license to receive funds from foreign donors expired in October 2021 and since then it has not been able to renew it. Overnight, its activities collapsed, and Yeme found himself back at square one.

“The operation theatre has stopped functioning entirely and even the doctors, who were coming here to see patients, have stopped coming,” he said. Today, the hospital cuts a sorry sight - beds are empty, the X-ray room and operating theatre are shut, chairs are covered in dust and the paint is peeling from the rain-drenched walls. Thousands of civil society groups in India have had their licenses to receive overseas donations cancelled since Prime Minister Narendra Modi’s government tightened surveillance on non-profit groups regulated under the Foreign Contribution Regulation Act (FCRA).

The government has said alleged irregularities on the part of NGOs were to blame, but civil society activists said the cancellations were part of a larger crackdown to stifle criticism of the government. The list of those affected includes Oxfam, Amnesty International and World Vision as well as reputed think tanks like the Centre for Policy Research (CPR), which had its license cancelled in January. Modi’s government has said the rule changes were needed to beef up accountability for the receipt and use of foreign funding because few of the more than 230,000 registered non-profits met basic statutory requirements or used the funds properly.

For BSFC, the damage rippled out beyond Anjanwel. “We had to cut our staff strength from 30 to about seven people; our programs had to be discontinued,” said BSFC’s trustee Anil Hebbar in a phone interview with the Thomson Reuters Foundation. According to the government’s FCRA dashboard, only 15,947 NGOs with an FCRA licence are still active - the permissions for 35,488 NGOs have either been cancelled or have expired and not been renewed

This has left many organizations struggling to survive and left some of the most vulnerable in this nation of 1.4 billion lacking vital services. Mukta Naik, a fellow at the CPR, which had its license cancelled, said the NGO sector was filled with uncertainty about what might be considered “subversive” in the future and were tending to lean towards working with government-backed projects.

She said the government should not seek to control the important sector. “Civil society can be an important ally, it is a space for governments to understand what people really want.” India’s Ministry of Home Affairs did not respond to several emails requesting comment.

The FCRA dates from 1976, a time of national emergency declared by then prime minister Indira Gandhi, who was seen as using the law to target critics of a civil rights clampdown. In 2020, the regulations were tightened to include a ban on NGOs transferring money from overseas contributions to other NGOs with similar licenses and imposed a spending limit of 20 percent on administrative costs such as staff and offices. “Many grassroots organizations, that had the FCRA license but didn’t have fundraising capabilities, would depend on larger organizations for their funding,” said Avinash Kumar, the former head of Amnesty India, who left after the organization shut down operations in India in 2020 after the government alleged it had committed FCRA violations. — Reuters