Answer: 

Introduction:

The Foreign Contribution (Regulation) Act (FCRA), 1976, was enacted in India to regulate the acceptance and usage of foreign contributions and hospitality by individuals and organizations. Over the years, the government has made several amendments to the Act, the most recent being in 2020. While the stated aim is to ensure transparency and accountability in foreign funding, some of these changes have sparked controversy.

Body:

Here are some of the critical amendments made to the FCRA and a critical examination of their implications:

• Decrease in administrative expenses: The cap on using foreign funds for administrative expenses has been reduced from 50% to 20%. This restricts NGOs’ ability to spend on critical overhead costs, such as salaries for staff, office rent, travel, training, etc., which are essential for their functioning.
• Prohibition on sub-granting: The amended act prohibits the transfer of foreign funds to any other person or entity (known as sub-granting). This impacts collaborations between NGOs, particularly when smaller grassroots organizations rely on larger NGOs for funds. While this rule may prevent the misuse of funds, it could also restrict genuine collaborations and the reach of beneficial programs to remote areas.
• Mandatory Aadhaar: The amended act requires office bearers of NGOs to provide Aadhaar numbers when registering or renewing their FCRA license. This raises concerns about privacy and the potential misuse of personal data. On the other hand, the government argues that this measure increases transparency and accountability.
• FCRA account in the State Bank of India, Delhi: NGOs are now required to open an FCRA-marked account in a specified branch of the State Bank of India in Delhi. While this centralization might make monitoring easier for the government, it could cause logistical difficulties for NGOs located in remote parts of the country.
• Suspension of registration: The Act now allows the government to suspend an NGO’s FCRA registration for up to 360 days, up from 180 days. This gives the government more time to prepare a case, but it also means NGOs might be unable to access necessary foreign funds for an extended period, hampering their operations.
• Government discretion: The amendments give the government enhanced discretionary powers to cancel an organization’s FCRA license if it believes the NGO is engaged in activities detrimental to the ‘public interest.’ Critics argue that this clause is vaguely defined and could be misused to stifle dissent.

Conclusion:

It’s crucial to strike a balance between ensuring accountability and maintaining the vibrant functioning of NGOs, a significant pillar of any democratic society.