Layoffs, pay cuts: Inside CPR’s ‘financial crisis’ after FCRA funds, tax exemption axed

The Centre for Policy Research has downsized its staff by 75 percent. Its faculty members — including fellows and senior fellows — have taken “massive pay cuts” ranging from 50 percent to full. The think tank had come under the income tax department’s tax scanner and faces a “serious financial crisis”, sources told Newslaundry.

CPR, widely seen as a “centrist” think tank that examines government policies, has lost 75 percent of its total receipts with the suspension of its Foreign Contribution Regulation Act licence in February. Last month, it also lost its tax exemption status as a charitable institute. It is perhaps the first think tank to lose both conditions, months after it was accused of irregularities in funding.

The think tank has also written to the Union Ministry of Home Affairs for 25 percent utilisation of its foreign contributions. “We have not heard back from the MHA,” said a source. MHA has not replied to Newslaundry’s query about having received any application from CPR. 

Suspension of its FCRA licence, a prerequisite for receiving for foreign funds, and withdrawal of its charitable status have led to the halt of several of CPR’s programmes and initiatives, said sources in the think tank. 

Additionally, those who are still working with CPR have been offered three-month contracts against the standard one-year renewal. “All decisions (pay cuts and job losses) are aligned with limited grants and resources that are available with us,” a member of the CPR’s governing board told Newslaundry.  

CPR has retrenched around 180 of its nearly 240 employees, mostly research associates, programme managers and field workers. “Most of them have left as CPR could not pay them while the rest either found better job opportunities or went abroad for higher studies,” said a fellow with the Delhi-based nonprofit, established in 1973.

Another fellow said the staff “were fully aware of the financial turmoil” and the retrenchment “was not ugly”. “They knew that CPR can’t pay them so they left on their own accord,” they said. 

Another researcher has stopped going to office as their programme was funded through “foreign contributions”. “Our funds came from BMGF (Bill and Melinda Gates Foundation). After FCRA suspension, we can’t access it. So it’s a given that the programme can’t move further… I am at the moment looking for odd consultant jobs. I hope to resume my duties once there is clarity on funds,” the researcher said, denying that they had formally resigned.

“All our financial resources have been closed off: international philanthropy via FCRA, as well as domestic funds on account of tax breaks as we were a charitable institute. Once these two conditions no longer exist, the ability of the institution to raise money in terms of its memorandum of association gets stifled. So we are facing a very serious financial crisis. We hope that the legal path will give us recourse and we can go back to raising funds,” said the member of the governing board.

Layoffs and shorter contracts

In the last seven or eight years, the think tank emerged as a place where young minds were trained to further debates on policy making and implementation challenges. These research associates or RAs “became the backbone of CPR’s research and knowledge building” while faculty members, including fellows and senior fellows, were the public faces.

In 2021-22, CPR had 106 research and programme staff on its payroll. Employees in these segments have faced the major brunt of the financial crisis.

“Job losses have happened because our funds are locked. Domestic funds have taken a hit too because donors are developing cold feet. Only a smaller proportion (of the retrenched staff) left because they found better opportunities. It is a reality that we have to face. An organisation with restricted funds has to operate on a much lower scale,” said the fellow quoted above.

CPR spent Rs 2.78 crore in 2021-22 and Rs 2.52 crore in 2020-21 on salaries and wages. 

A former researcher, who left the think tank a few months ago due to “uncertainty” and for higher education, said the CPR has started renewing contracts for a few months instead of the standard one year. “What I like about CPR is that it is fiercely independent. It is not radical but centrist. I felt a sense of freedom there… If you look at an array of think tanks that work with the government, you realise that they avoid criticising the government. Their criticism begins and ends with suggestions,” he said.

Another fellow with CPR said he has “voluntarily” decided to take a 50 percent pay cut. “It was done to ensure that there is liquidity to pay for research staff,” he said.

Pay cuts are not uniform. “There are some who are working without any salary because they have other means of earnings. So it’s not uniform. It depends on who is funding the projects. If it is a programme that is purely funded through foreign contribution, the pay cut could be higher. And for those involved in service agreements with state governments, it could be lower,” said another source.

Impact on research

CPR has substantially scaled down its operations, sources said. 

The member of the governing board listed research works that have been “significantly” affected: administrative reforms and capacity augmentation, urbanisation, air pollution, urban and rural sanitation, urban housing, female labour force participation, tracking social policy budgets, understanding implementation challenges, training panchayats and block level officers on finance and governance.

The functionary said the CPR has a unique position in the think tank sector as it produces knowledge from the grassroots. “It is different from other think tanks that are not able to do grassroots work,” they said.

CPR, which has worked closely with the Union ministries, Niti Aayog and state governments, counts many domestic donors in its list of grantees. They include: Indian Council of Social Science Research, Ministry of Jal Shakti, Andhra Pradesh and Meghalaya governments, and Niti Aayog.

Scholars of late have monitored trends on the PM Poshan scheme, social protection of sanitation workers, energy transition in coal states, India’s welfare system, allocation to the rural job guarantee scheme, etc.

In 2021-22, the think tank published 565 news articles, 41 policy briefs and reports, 37 journal articles, 15 working papers and four books; and held 57 talks, workshops and seminars.  

One of its initiatives that came in the cross-hairs of the IT department was CPR’s environmental justice programme funded by Namati, a legal empowerment organisation. Under this initiative, CPR studied issues and questioned environment law design, institutional action and public participation in industrial, coastal and mining regions. It also trains grassroots workers as paralegals.

‘Irregularities’ and ‘Adani link’

The key allegation in the I-T notice is that CPR “diverted” its funds for activism and environmental litigation in violation of its “objects of the trust”. In its 33-page notice in December last year, the I-T department alleged “direct involvement of CPR employees in” the anti-mining “Hasdeo movement” led by Aalok Shukla’s Chhattisgarh NGO Jana Abhivyakti Samajik Vikas Sansthak. Newslaundry has a copy of the notice.

The CPR has partnered with JASVS as part of its programme with Namati – an NGO working for environment justice – for “research and education” on environmental compliance in the Hasdeo area, which comprises three districts and has huge coal reserves. 

“It is evident that the ultimate purpose of ‘Namati – Environment Justice Program’ is to file litigation and complaints instead of carrying out any specified research or ‘educational’ activity,” read the I-T notice.

Between 2016-17 and 2020-21, CPR had received Rs 11.55 crore from Namati, showed the notice. 

Hasdeo has seen anti-mining protests against the Adani group, which has nine coal blocks in the region. Shukla, convener of the Hasdeo Bachao Andolan, had led the movement against coal mining. 

It was not only CPR that faced heat. On September 7 last year, the day CPR’s office was “surveyed” by I-T sleuths, the Delhi office of Legal Initiative for Forest and Environment, co-founded by environmental lawyer Ritwick Dutta, was “surveyed” too for “using foreign funds against Adani projects”.

The member of CPR’s governing board denied the allegations in the I-T department notice. “You will not find any PIL in court that has CPR’s name on it unless somebody has filed a case against us. We absolutely don’t do any such things.”

On the question of its partnerships with NGOs, they said CPR’s job “has entirely been in the domain of understanding impact, gaps and implementation as to why environmental laws are not complied with”. There are around “30-40” NGOs the centre has partnered with for “research and education” purposes, the member said.     

CPR chief Yamini Aiyar seconded the board member.

“CPR has always maintained that its activities are firmly within the context of research and education. It’s been globally recognised for its high quality research as an institution. It will continue to fight for that recognition and the nature of work it does. We are confident that whatever questions the authorities have had on the nature of our work will be resolved speedily because we have not deviated from our goal,” she told Newslaundry.

An office-bearer from JSAVS told Newslaundry that they had a consultancy agreement with CPR on non-compliance of environmental laws. 

‘Future in the hands of court’

A faculty member with CPR said the think tank has been reduced to a “pale shadow of its former self”, and pinned hopes on courts for relief.

“Times have been tough for CPR since the IT raid but the institution has not collapsed despite such pressure. A lot of credit for it goes to Yamini Aiyar who has led the institution with empathy and calmness during this period of great stress. The future of this 50-year old institution is now in the hands of the courts, and whether they want a fiercely independent think tank to work in today’s India or not. Survival of CPR is essential but more critical will be its journey to regaining full functionality as a place for disparate, diverse, different voices who are neither beholden to those in power nor to any corporate control,” he said. 

Chennai-based environmental activist Rajesh Ramakrishnan, who is associated with Indian Community Activist Network, described CPR as “the most respected” civil society organisation of the country.

On possible reasons for the government action, he claimed that CPR’s reports on environmental governance and violations “were not looked at well by the government” even though the “think tank is not radical”.

“This is a way to bring down all civil society organisations that are working on the environmental governance issue. The current government is on a path where the system exists to give environmental clearances. Compensatory afforestation is the only solution the government comes up with. It’s deeply flawed from an ecological perspective.”

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