The Foreign Contribution (Regulation) Amendment Bill, 2020, recently passed by Parliament, changes the foundational Foreign Contribution (Regulation) Act, 2010. The alterations made focus on refining rules around the acceptance and utilization of foreign contributions.
Provisions of the Amendment Bill
The Amendment Bill introduces several key modifications to the existing law. The first major amendment is a prohibition on the acceptance of foreign contributions by public servants. This includes individuals in service or pay of the government or those remunerated by the government for public duties. As per the FCRA 2010, this prohibition also extends to election candidates, newspaper editors or publishers, judges, government servants, legislators, political parties, amongst others.
Regulations on Transfer of Foreign Contribution
The new law forbids the transfer of foreign contribution to another entity, overturning a provision in the FCRA 2010 that permits such transfers to registered persons. A ‘person’, as per the Bill, could be an individual, an association, or a registered company.
Mandatory Aadhaar for Registration and FCRA Account Rules
The legislation mandates that all office bearers, directors, or key functionaries of entities receiving foreign contributions must provide their Aadhaar number as an identification document. For foreigners, a copy of the passport or Overseas Citizen of India Card is required for identification. The bill also stipulates that foreign contributions should only be received in designated FCRA accounts at specified branches of the State Bank of India in New Delhi, with no other funds being deposited in these accounts.
Restrictions on Utilization of Foreign Contributions
The Bill allows the government to restrict the use of unutilized foreign contributions under the condition that the recipient contravenes the provisions of the FCRA, based on government inquiry. The Bill also reduces the percentage of foreign contributions that can be used for administrative costs from 50% to 20%.
Certificate Surrender and Purpose for Amendment
The amendment permits the central government, post-inquiry, to allow a person to surrender their registration certificate once they have been deemed compliant with all FCRA rules and regulations. The rationale behind these changes is to enhance transparency and accountability in receipt and utilization of foreign contributions, while supporting NGOs working for societal welfare.
Challenges Posed by the Amendment
Despite its benefits, the new law has also raised certain concerns. It may negatively affect small NGOs and hinder collaborative research due to restrictions on transferring foreign funds. The law may potentially curtail the competitiveness and creativity of NGOs and contradict international law. It may also impinge upon India’s constitutional provisions protecting the rights to freedom of association, expression, and assembly.
Overview of the Foreign Contribution (Regulation) Act (FCRA), 2010
The FCRA regulates foreign funding of entities in India and is enforced by the Ministry of Home Affairs. The Act permits individuals to accept foreign contributions up to INR 25,000 without MHA permission, ensuring adherence to stated purposes for which such contributions are received. Organizations must register themselves every five years under the Act.
Suggestions for Improvement
NGOs play a crucial role in implementing governmental schemes at grassroot levels and filling gaps in public services. The government should foster a framework of global engagement as per the ancient Indian ethos of ‘Vasudhaiva Kutumbakam’ (‘the world is one family’). It should avoid acting with vendetta against NGOs that critique its functioning. Encouragement of idea and resource sharing across national boundaries is essential for a global community, provided there are robust systems to prevent misuse of funds.
