Foreign Contribution (Regulation) Act

The Ministry of Home Affairs (MHA) has cancelled the registration of at least five Non-Governmental Organizations (NGOs) for allegedly violating provisions of the Foreign Contribution Regulation Act (FCRA).

About Foreign Contribution (Regulation) Act:

• The FCRA was enacted in 1976 during the Emergency period due to concerns about foreign interference in India’s affairs.
• The act regulates foreign donations to ensure operations align with the values of a sovereign democratic republic.

Key Amendments and Provisions:

• 2010 Amendment: Consolidated laws to regulate the acceptance and utilization of foreign contributions, prohibiting their use for activities detrimental to national interest.
• 2020 Amendment:
  • Tightened government control and scrutiny.
  • Prohibited the transfer of foreign contributions to any other person or organization.
  • Reduced the limit of foreign contribution usage for administrative expenses from 50% to 20%.

Registration Requirements:

• Entities must register under the FCRA to receive foreign donations in India.
• Registration is granted for activities in cultural, economic, educational, religious, or social areas.
• Entities can register under multiple categories, allowing for diverse activities.
• Applicants must open a bank account at a specified branch of the State Bank of India in New Delhi for receiving foreign funds.

Prohibitions and Restrictions:

• The act prohibits funding to candidates, journalists, media companies, judges, government servants, politicians, and political organizations.
• Activities such as religious conversion (direct or indirect), involvement in creating communal tension, or sedition are also prohibited.

Validity and Renewal:

• FCRA registration is valid for five years.
• NGOs must apply for renewal within six months of the registration’s expiry.
• The government can cancel an NGO’s registration for various reasons, including violations of the act or lack of reasonable activity in their chosen field for two consecutive years.
• Once canceled, an NGO is ineligible for re-registration for three years.

FCRA 2022 Rules:

• Introduced changes in July 2022, increasing the number of compoundable offences from 7 to 12.
• Raised the limit for contributions from relatives abroad that do not require government intimation from Rs 1 lakh to Rs 10 lakh.
• Extended the time limit for intimation of the opening of bank accounts.

Ref: Source