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Indian Government Stokes Up, Once Again, Anxieties About Ford

 

The government of India notified the Ford Foundation in April that it will be included in the category of institutions that need “prior permission” to accept foreign funds, and requiring all its grants to be pre-approved by the government. This article provides the background to the Foundation’s hitherto special status in India, refers to some controversies in the past and provides a prognosis for the Foundation’s future work in India.
 
By R. Sudarshan
 
In India today it is not very well known that Prime Minister Nehru granted the Ford Foundation American diplomatic privileges and authorised land to be leased to it in the Lutyens’s Bungalow Zone, where an American architect, Joseph Allen Stein, built the Foundation’s offices, blending into the beautiful Lodi Garden. 
 
The privileges of the Ford Foundation in India, which it retains till today, were listed in the very first grant document signed, in 1952, by the Ministry of Finance and Douglas Ensminger, the Foundation’s founding representative in India until he retired in 1970, to support a Community Development Project managed by the Government of India.
 
Among the privileges granted to the Foundation are exemption from income tax for its non-Indian staff and waiver of custom duties on goods imported for its official use and by projects it funded. 
 
A period of complete trust and confidence in the judgment of the Ford Foundation’s staff to identify and support state-led initiatives ended with the death of Prime Minister Nehru in 1964. In that year, Foundation-funded economists working on India at the Massachusetts Institute of Technology’s Center for International Studies (CIS) developed a model of the Indian economy projecting the need to shift the emphasis of Indian planning, in the formulation of its fourth five-year plan, away from Soviet Union-inspired investment in heavy industries (machines to make machines) towards agriculture and wage goods. 
Coincidentally, CIA affiliations of the former director of the MIT Center were published in the American press, leading to an outcry in India that its planning process had been infiltrated by the CIA. The Ford Foundation was forced to terminate its grant to CIS to support its studies on India. Indian experts in its Planning Commission terminated the work they were doing with MIT economists, Stephen Marglin and Thomas Weisskopf, who later joined Harvard, abandoning MIT. 
 
The Foundation in India weathered the allegation that its activities in India were CIA “Trojan horses”. Its consultants continued to work with ministry officials and city planners in Calcutta and Delhi. Its grants were cleared by the procedure established in 1952 whereby the Department of Economic Affairs responded to grant proposals by sending to the Foundation’s office letters communicating that the government had “no objection” to those proposals. 
 
This procedure was understandable in the period when the Foundation’s grants were made to directly support projects of the Union government and State governments or state-supported organisations, such as institutes of technology, management, agricultural universities, the Indian Institute of Public Administration and the Lal Bahadur Shastri National Academy of Public Administration. 
 
In the early 1970s, the Foundation stopped employing foreign consultants on its projects. It decided, instead, to make grants to Indian institutions whose work accorded with the priorities set by its Trustees and granted, rent-free, its spacious premises in Lodi Estate to the United Nations and converted its guest house into a more modest office. Gradually, non-government organisations (NGOs), civil society organisations (CSOs) and advocacy groups advancing human rights, social justice and governance concerns outnumbered government entities among the Foundation’s grantees. Nevertheless, no changes were made in the procedure established by the Government to convey its “no objection” to grant proposals. 
 
On June 26, 1975, a state of emergency was imposed by Prime Minister Indira Gandhi, beleaguered by opposition parties’ demands for her resignation after she had been convicted by the Allahabad High Court for “corrupt practices” in her landslide 1971 election victory to parliament. Fears of the “foreign hand” intent on subverting an established constitutional government in India resurfaced. 
 
During the emergency, when nearly all opposition members in parliament were in jail, the Foreign Contributions Regulation Act of 1976 (FCRA) came into force, banning foreign funding to political parties, newspapers and members of legislatures. It required all organisations seeking support from foreign sources (except the United Nations and its affiliated bodies, including the World Bank and Asian Development Bank) to register themselves with the Home Ministry and obtain prior permission of the government before accepting foreign funding. It required these organisations to send annual reports to the Home Ministry even if they received no funds in any given year.
 
In 1984, the FCRA provisions were tightened further with more penalties for non-compliance. With respect to the Ford Foundation’s grants, the only difference in the procedure established in 1952 for conveying the government’s “no objection” was that the Department of Economic Affairs would obtain “clearance” for those grants from the FCRA department in the Home Ministry. 
 
When Congress was the ruling party in Delhi, Gandhian institutions came under strict scrutiny and their sources of funding were closely monitored. From 1987 until 1991 a grant from the Ford Foundation to support a new institution, Public Interest Legal Support and Research Centre (PILSARC), could not get FCRA clearance. In 1991, though, the government overruled its earlier decision on foreign funding for legal aid and services, and communicated its “no objection” to PILSARC, which received the grant more than four years later. 
 
Those long-standing arrangements changed earlier this year when the Bharatiya Janata Party (BJP) government, led by Prime Minister Narendra Modi, directed the Reserve Bank of India to ensure that all Indian banks report to it any deposits received from the Ford Foundation by institutions having accounts with them. The government is obviously furious that Sabrang Communication was given a grant of $200,000 in 2006 by the Ford Foundation to, as described in its annual report, “address communalism and caste-based discrimination in India through active research, Web-based information dissemination, development of civil society networks and media strategies”. It reacted, apparently, to statements by Teesta Setalvad and her husband, Javed Anand, managers of Sabrang Communication, that accused Prime Minister Modi of responsibility for instigating riots in 2002 against Muslims in Gujarat, resulting in a massacre. 
 
Moreover, Arvind Kejriwal and Manish Sisodia, leaders of the Aam Aadmi party, which resoundingly defeated the BJP in the 2015 elections to the Delhi State Assembly, have also been beneficiaries of the Ford Foundation. Kabir, an NGO managed by them, received Ford Foundation support amounting to $400,000 over a three-year period beginning in 2008 to “produce training materials on India’s Right-to-Information law, document & disseminate information about its effective use to promote transparent & accountable governance & for staff development”. 
 
The government’s recent action does not change the procedure it has followed since 1952 for conveying to the Ford Foundation its “no objection” to its grant proposals. In fact, the grants to Sabrang Communication and Kabir must have been made by the Foundation only after receiving “no objection” letters from the Department of Economic Affairs. 
 
What is different now is that the government regards the Ford Foundation’a New Delhi office as an entity that should register itself under FCRA because it receives “foreign contributions” from the Foundation in New York. This also entails an additional obligation of submitting annual reports to the Home Ministry on how funds credited to its bank account in India were used.
 
The government is also concerned whether the Foundation’s grantees have used its money exclusively for the purposes for which they were granted. There may also be an apprehension that the Foundation could have made some grants directly from New York without the India office obtaining the “no objection” letter from the Department of Economic Affairs. 
 
The Ford Foundation remains highly regarded in government circles for the contribution it made towards the success of India’s Green Revolution, in partnership with the Rockefeller Foundation. They supported the work of scientists who developed high-yielding varieties of wheat and an intensive effort to persuade farmers, who are generally risk-averse, to switch over to planting the high-yielding wheat.
 
The former Prime Minister of India, Narashimha Rao, when he was Minister for Human Resources Development in the government headed by Prime Minister Rajeev Gandhi, gave the Foundation some memorable advice during a meeting where I requested his intervention to get more speedy delivery of “no objection” letters to the grants it had proposed. He said the Foundation should focus its energies in demonstrating solutions to a few big problems instead of making a number of scatter-shot grants with relatively low overall impact.
 
After complimenting the Foundation for what it did for the Green Revolution, he said, “Let me give you another revolution in which the Foundation should have a role. The Green Revolution was relatively easy because the wheat plant is predictable in its responses to inputs of water, fertilizer and pesticides. The revolution I want to see happen is girls’ education. People, unlike plants, are not predictable and so it is hard to tell what inputs or incentives will persuade parents to send their daughters to school and keep them there until they finish high school.
 
“I suggest that the Ford Foundation should select a few districts to experiment on what needs to be done to ensure that every girl goes to school and completes high school. If the Foundation can figure how to change the attitudes of parents toward girl children, much as it did to change attitudes of farmers who feared adopting a new variety of seeds, then the government will again appreciate its works and replicate its success and scale it up all over the country.”
 
The Ford Foundation has played a significant role in the development of an array of reputable Indian institutions for 63 years. It can be expected to weather the latest storm over some activities of some of its more recent grantees. 
 
But it also is necessary for the Foundation to reconsider its current strategy of making relatively small grants to a large number of non-governmental entities. 
 
R. Sudarshan is Dean and a professor at the Jindal School of Government and Public Policy, O.P., Jindal Global University, in Sonipat, India. He is a former staff member of the Ford Foundation and the United Nations Development Programme.

 

 

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