The Ministry of Home Affairs (MHA) recently introduced new rules under the Foreign Contribution Regulation Act (FCRA), 2010. This initiative aims to enhance transparency and accountability for foreign contributions while offering a facilitative environment for genuine non-governmental organisations or associations (NGOs).
Background of FCRA
The FCRA came into existence in 1976 and was updated in 2010. Its primary function is to regulate foreign contributions or donations and hospitality (including air travel, hotel accommodation, etc.) to Indian organisations and individuals. The objective is also to curb contributions that could potentially harm national interest. The law applies to all associations, groups, and NGOs who aspire to receive foreign donations. Government officials, judges, media persons, members of legislatures, and political parties are among the sectors prohibited from receiving any foreign contribution.
New Rules under FCRA 2010
The MHA’s recent amendments to the FCRA Rule, 2011 have opened up new possibilities. It has made regulations flexible for farmers, students, religious and other groups, not directly associated with any political party, to receive foreign funds if they are not engaged in active politics.
However, the restructured rules have also hardened FCRA registrations. Any organisation seeking registration must exist for three years and have invested at least 15 lakh rupees in its core activities for societal benefit during the past three financial years. The Central Government, if deem fit, may waive these conditions for exceptional cases or for those controlled by the Central or a State Government.
Organisations or NGOs applying for the FCRA registration must provide a commitment letter from the donor specifying the foreign contribution amount and its purpose.
Provision for Political Groups
An added clause now dictates that only those groups mentioned in Clause V and VI will be recognised as a political group by the Centre if they partake in “active politics or party politics.” Previously, the Central Government could label an organisation as political based on six criteria under these clauses.
Clause V of Rule 3 previously qualified farmers, workers, students, and youth organisations rooted in caste, community, religion, language, or otherwise as political groups if their objectives or activities included political interests of such groups.
On the other hand, Clause VI recognised an organisation as political if it frequently engaged in or used common methods of political action, such as rasta roko, jail bharo, rail roko, bandh, or hartal, in support of public causes.
