The Ministry of Home Affairs recently suspended the Foreign Contribution Regulation Act (FCRA) licence of the Centre for Policy Research (CPR). As a not-for-profit society, CPR was previously surveyed by the Income Tax Department together with Oxfam India and the Independent and Public-Spirited Media Foundation (IPSMF).
Understanding the Foreign Contribution Regulation Act
The FCRA was enacted during the Emergency period in 1976. This was amid concerns that foreign powers were infiltrating India’s affairs by channeling money into the country through independent organizations. The aim of the law was to oversee foreign donations to individuals and associations, ensuring their activities aligned with the principles of a sovereign democratic republic.
Amendments to the FCRA
An amended version of the FCRA was introduced in 2010. The objective of this amendment was to consolidate the laws on the use of foreign funds and to prohibit their use for any activities deemed detrimental to national interest. In 2020, a further amendment tightened government control and scrutiny over the receipt and utilization of foreign funds by NGOs.
Criteria Under the FCRA
The FCRA stipulates requirements for any person or NGO seeking to receive foreign donations. They must be registered under the Act, open a bank account for the receipt of foreign funds in the State Bank of India, Delhi, and use those funds strictly for the purpose for which they were received, as defined in the Act. Registrations are granted to individuals or associations with definite cultural, economic, educational, religious, and social programs.
Exemptions and Prohibitions Under the FCRA
According to the FCRA, applicants should not be fictitious, have a record of forced religious conversions, or have been convicted for creating communal tension or promoting sedition. Furthermore, the Act prohibits the receipt of foreign funds by election candidates, journalists, media companies, judges, government servants, members of legislature, political parties and their office-bearers, and politically inclined organizations.
Validity and Rules of FCRA Registration
FCRA registrations are valid for five years. NGOs are expected to apply for renewal within six months of the date of expiry of registration. However, the government has the authority to cancel an NGO’s registration if they violate the Act, fail to undertake meaningful activity in their field for two consecutive years, or become defunct. Once an NGO’s registration is cancelled, it cannot re-register for three years.
New Rules Under FCRA 2022
In July 2022, the MHA amended the FCRA rules, increasing the number of compoundable offenses from seven to twelve. Other significant changes include raising the exemption limit for government intimation for contributions from relatives abroad to below Rs 10 lakh, up from the previous limit of Rs 1 lakh, and extending the time limit for notifying the opening of bank accounts.
