The Foreign Contribution Regulation Act (FCRA) came into existence in 1976 during the Emergency era, with the principal motive of controlling foreign interference in India’s domestic affairs. This was done through financial associations with independent Indian organizations. The FCRA aimed to regulate the inflow of foreign donations to individuals and associations. The primary goal was to ensure that these entities functioned consistently with the values inherent to a sovereign democratic republic.
Amendments to the FCRA
The FCRA underwent significant amendments twice, in 2010 and 2020. The 2010 Amendment sought to consolidate the law to govern the acceptance and utilization of foreign contributions by specific individuals or groups. It also aimed to prevent foreign contributions from being used for activities detrimental to national interests.
The 2020 Amendment introduced stricter controls, prohibiting the transfer of foreign contribution to other entities and reducing the limit of foreign fund usage for administrative costs from 50% to 20%.
FCRA Registration Details
The FCRA registration is a prerequisite for individuals or associations seeking foreign donations in India. The entities can range across various sectors, including cultural, economic, educational, religious, or societal programs.
Entities have the provision to register under multiple categories based on their program-specific activities. However, the applicants need to adhere to certain prohibitions such as not involving themselves in religious conversion activities and steering clear of activities related to sedition.
Formalities, Validity, and Renewal of FCRA Registration
FCRA registration lasts for five years, at which point the NGOs must apply for renewal within six months of the registration’s expiry. The government has the power to revoke an NGO’s FCRA registration for reasons like violation of the Act or lack of adequate activity in their selected field for two successive years.
New Amendments to FCRA 2022 Rules
In July 2022, the Ministry of Home Affairs (MHA) introduced fresh modifications to the FCRA rules. These included an increase in compoundable offenses from seven to twelve and a rise in the limit for non-government-approval-required contributions from relatives overseas from Rs 1 lakh to Rs 10 lakh.
Challenges faced by NGOs Under the FCRA
NGOs face several hurdles in terms of FCRA registrations. As well as strict compliance and extensive documentation requirements, lengthy administrative procedures delay their operations and access to funds. Furthermore, transparency issues have raised concerns about the specific utilization of foreign funds. Coupled with high denial rates and potential political influence in registration, these challenges highlight the need for reforms.
The Way Forward
The steps towards improving the FCRA would include strengthening oversight mechanisms to prevent potential misuse of foreign contributions. Simplifying and speeding up the registration process would help NGOs gain more accessible funding. It is crucial to ensure that the registration process remains free from political influence and is based on objective criteria. Encouraging NGOs to provide detailed reports on the use of foreign funds will promote transparency and trust.
