The Union Ministry of Home Affairs (MHA) has recently cancelled the Foreign Contribution (Regulation) Act (FCRA), 2010 registration of various non-governmental organisations (NGOs). The suspension of an NGO’s FCRA licence results in the inability to receive fresh foreign funds from donors as long as a probe by the Home Ministry is ongoing. The FCRA is mandatory for associations and NGOs to be able to receive foreign funds.
Key Points: Registration Cancellation
Vadodara-based NGO had its FCRA registration cancelled due to accusations of illegal conversion of Hindu community members, funding anti-CAA protests, and for alleged criminal activities promoting Islam. Similarly, the FCRA registrations of two Christian NGOs – the New Hope Foundation in Tamil Nadu and Holy Spirit Ministries from Karnataka – were also rescinded. The MHA cancelled the FCRA registration of AFMI Charitable Trust for violating Act provisions.
Prior Reference Category
The MHA placed 10 Australian, American, and European donors on its watchlist. As a consequence, the Reserve Bank of India directed all banks to notify the Ministry of any funds sent by these foreign donors before being cleared. All these donors operate in fields such as climate change, environment, and child rights.
Foreign Contribution (Regulation) Act (FCRA), 2010
The FCRA regulates foreign funding of individuals in India and is administered by the Ministry of Home Affairs. Individuals can accept foreign contributions without MHA permission, as long as the sum is less than Rs. 25,000. The Act ensures recipients adhere to the stated purpose for which the contribution was received. Under the Act, organisations must register themselves every five years. Registered NGOs can receive foreign contributions for social, educational, religious, economic, and cultural purposes.
Foreign Contribution (Regulation) Amendment Act, 2020
The amended Act introduces several key changes. It bars public servants from receiving foreign contributions and prohibits the transfer of foreign contribution to any unregistered person. The Act makes Aadhaar number mandatory for all NGO office bearers, directors or key functionaries as an identification document. Foreign contributions must be received only in an FCRA-designated account located in certain branches of the State Bank of India, New Delhi. The Act also reduces the percentage of foreign funds that can be used for administrative expenses from 50% (as per FCRA 2010) to 20%.
Issues Related to FCRA
The FCRA regulates the receipt of funding from sources outside of India to NGOs working in India. It prohibits the receipt of foreign contributions “for any activities detrimental to the national interest” and allows the government to refuse permission if it believes the donation will adversely affect “public interest” or the “economic interest of the state”. However, the definitions of “public interest”, “national interest”, and “economic interest” remain vague.
FCRA Impact on Rights and Freedoms
The vagueness of these terms have serious consequences on both the right to free speech and freedom of association under Articles 19(1)(a) and 19(1)(c) of the Constitution. Allowing only select political groups to receive foreign donations can introduce biases in favor of the government. NGOs may be inclined to self-censor, knowing that excess criticism might cost their survival.
International Perspective
The right to freedom of association is part of the Universal Declaration of Human Rights (Article 20), thus a violation of this right constitutes a human rights violation. In April 2016, the UN Special Rapporteur on the Rights to Freedom of Peaceful Assembly and of Association undertook a legal analysis of the FCRA, 2010.
Way Forward
Though regulation of NGOs is necessary to prevent corruption, there needs to be clarity on terms like ‘public interest’. Excessive regulation of foreign contributions may impact the functioning of NGOs, which are crucial in implementing government schemes at the grassroots level. The regulation should not deter sharing of resources across national boundaries, essential to the functioning of a global community unless there is reason to believe the funds are being used to aid illegal activities.
