March 22, 2021

India’s middle class shrinks by 32 million, pushes 75 million below poverty line: Pew Research

Livelihoods: According to a report by Pew Research Centre, the COVID-19-led recession in India may have shrunk the country’s middle-class population by 32 million, pushing 75 million more people into poverty in 2020. Meanwhile, the number of people in China in the middle-income tier decreased by only 10 million, with the poverty level remaining unchanged.

The Pew report is based on an analysis of World Bank data.

The differences between the two countries can also be explained by the state and trajectory of their economies. India went through its worst recession in 40 years with massive job losses in FY 2020-21. In January 2021, the World Economic Update released by the International Monetary Fund estimated India’s economy would contract by eight percent in FY21 while China would expand by 2.3 percent in the same period.

Prior to the pandemic, it was anticipated that 99 million people in India would belong to the global middle class in 2020. However, a year into the pandemic, this number is estimated to be 66 million. Meanwhile, the number of poor in India is projected to have reached 134 million, more than double the 59 million expected prior to the recession. According to the report, the poverty rate in India rose to 9.7 percent in 2020, a sharp increase from the January 2020 forecast of 4.3 percent.

For its analysis, the research agency divides a country’s population into five groups by income: poor, low income, middle income, upper-middle income, and high income. The poor live on USD 2 or less daily, low income on USD 2.01-USD 10, middle income on USD 10.01-USD 20, upper-middle income on USD 20.01- USD 50, and high income on more than USD 50.

Read this to know how COVID-19 has affected women’s income, health, and security.


May 20, 2021

Home Ministry extends validity period of FCRA registration certificates

Fundraising & Communications: The Ministry of Home Affairs (MHA) has issued a circular extending the validity of FCRA registration certificates to September 30th, 2021. This applies to all FCRA licences that have expired or will expire between September 29th, 2020 and May 31st, 2021. The decision to extend the deadline has been driven by the exigencies arising from the COVID-19 situation.

FCRA refers to the Foreign Contribution (Regulation) Act 2010, which permits charitable organisations based in India to raise funds from foreign sources.

The order also clarified that nonprofits that have already opened an account and have the requisite permission to receive foreign aid, can henceforth receive it only in these newly-opened accounts.

The FCRA law was amended in September 2020 to include a clause that mandated that all nonprofits receiving foreign aid must necessarily open an account in State Bank of India’s New Delhi Main Branch. The government had initially set the deadline for this account opening as March 31st, 2021; it later extended it to June 30th, 2021 after several nonprofits argued in court that there had been delays because necessary approvals from MHA had not been received.

Several organisations have not been able to receive foreign funds during the crisis caused by the second wave, and this has impacted their COVID-19 relief efforts. Relaxing the foreign funding rules could significantly help organisations ramp up their operations to help individuals, supply critical healthcare equipment, and respond to communities in rural areas.

Read this article to know how amending the FCRA can have unforeseen implications.


May 20, 2021

Corporate spending on oxygen support and medical equipment now counts as CSR

Philanthropy & CSR: The Ministry of Corporate Affairs (MCA) has issued a circular that allows corporate spending on health infrastructure for COVID-19 care to qualify as corporate social responsibility (CSR) expenditure.

This includes setting up medical oxygen generation and storage plants, manufacturing and supply of oxygen concentrators, ventilators, cylinders, and other medical equipment to counter COVID-19.  

The announcement comes at a time when all efforts are being directed towards expediting efforts to support the country’s healthcare infrastructure.

According to the circular, companies can now undertake projects and activities in collaboration with other companies using CSR funds. Additionally, they can contribute to specified research and development projects, as well as publicly funded universities and certain organisations that conduct research in science, technology, engineering, and medicine.

The government had earlier clarified that setting up makeshift hospitals and temporary COVID-19 care facilities would also be considered a CSR activity. Rajesh Verma, the Corporate Affairs Secretary, has requested businesses to consider converting vacant office buildings into COVID-19 facilities to cater to the rapidly increasing caseload.

Read this article to understand why media attention on COVID-19 deaths due to lack of oxygen in big cities has skewed donor priorities.