Context
Recently, the Ministry of Home Affairs (MHA) extended the validity of Foreign Contribution (Regulation) Act (FCRA) registration of non-government organizations (NGOs) and associations till June 30.
Extension of the Validity of FCRA Registration Certificates
- The Ministry has extended the validity of NGOs at least nine times since 2020 as the applications could not be processed within the stipulated time frame.
About the Foreign Contribution Regulation Act (FCRA)
- Foreign Contribution Regulation Act: It regulates and prohibits the acceptance and utilization of foreign contributions by certain associations for any activities detrimental to the national interest.
- The Act also prohibits the receipt of foreign funds by candidates for elections, journalists or newspaper and media broadcast companies, judges and government servants, members of the legislature and political parties or their office-bearers, and organizations of a political nature.
- Origin: The FCRA was enacted during the Emergency in 1976 amid apprehensions that foreign powers were interfering in India’s affairs by pumping money into the country through independent organizations.
- Duration of Approval Granted: FCRA registration is valid for five years.
- NGOs are expected to apply for renewal within six months of the registration expiry date. In case of failure to apply for renewal, the registration is deemed to have expired.
Amendments to the Foreign Contribution Regulation Act (FCRA)
- FCRA Amendment 2010: Enacted to consolidate the law on utilizing foreign funds, and to prohibit their use for any activities detrimental to national interest.
- FCRA Amendment 2020: The law was amended again, giving the government tighter control and scrutiny over NGOs’ receipt and utilization of foreign funds.
- Foreign Contribution (Regulation) (Amendment) Rules, 2022: In July 2022, the Ministry of Home Affairs (MHA) changed FCRA rules, increasing the number of compoundable offenses under the Act from 7 to 12.
- The other key changes were:
- Exemption from intimation to the government for contributions less than Rs 10 lakh, the earlier limit was Rs 1 lakh.
- Increase the time limit for the intimation of the opening of bank accounts.
Foreign Contribution (Regulation) Amendment Act 2020:
- Prohibition to Accept Foreign Contribution: The act adds public servants to the list of parties prohibited to accept any foreign contribution.
- Transfer of Foreign Contribution: The act prohibits the transfer of foreign contribution to any other individual, association, or a registered company.
- Aadhaar for Registration: Any person seeking prior permission, registration or renewal of registration must provide the Aadhaar number.
- In case of a foreigner, they must provide a copy of the passport or the Overseas Citizen of India card for identification.
- FCRA Account: Foreign contribution must be received only in an account designated by the bank as “FCRA account” in such a branch of the State Bank of India, New Delhi, as notified by the central government.
- No funds other than the foreign contribution should be received or deposited in this account.
- Restriction in Utilisation of Foreign Contribution: The government may restrict usage of unutilised foreign contribution for persons who have been granted prior permission to receive such contribution.
- Reduction in Use of Foreign Contributions for Administrative Purposes: Organisations must not use more than 20% of the contribution for meeting administrative expenses.
- Suspension of registration: The government may suspend the registration and such suspension may be extended up to an additional 180 days.
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March 30, 2024