Foreign Contribution Regulation Act (FCRA)

Foreign Contribution Regulation Act (FCRA)

The government often invokes the provisions of the Foreign Contribution (Regulation) Act (FCRA) in matters relating to foreign funding of non-governmental organizations.

A West Bengal-based non-governmental organization (NGO) has expressed concern over suspension of its funding under certain provisions of the Foreign Contribution (Regulation) Act (FCRA), 2010.

Applicable provisions of FCRA 2010 (under Ministry of Home Affairs)

  • Section 13- FCRA certificate can be pending for a period not exceeding 180 days. No foreign contribution will be received during the period of suspension.
  • Section 14(4) provides that the FCRA certificate (necessary for receiving foreign money) can be canceled for contravention of any rule or provision of the Act.
  • It is to be noted that the above section has been invoked several times for ‘religious conversion/conversion’ related activities.

Provisions regarding regulation of NGOs in India

Foreign Exchange Management Act (FEMA), 1999 regulated by the Ministry of Finance:

There are some NGOs, which are registered under FEMA and continue to distribute foreign funds to various organizations in India.

The following provisions have been made regarding the regulation of NGOs in the new rules under the FCRA Amendment 2020:

  • Ban on fund transfer from one NGO to another.
  • Reducing administrative expenditure from 50% to 20% through foreign funds.
  • Making Aadhaar mandatory for registration.
  • Registering or obtaining prior permission for receiving foreign funds.

Source – The Hindu

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