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Context: Licenses of six NGOs have been suspended under the Foreign Contribution Regulation Act (FCRA) by the Union Home Ministry this year, 

More about news:

  • Among the six NGOs, four are Christian associations. 
  • Suspension of FCRA license means that the NGO can no longer receive fresh foreign funds from donors pending a probe by the ministry.
  • The Home Ministry has cancelled 20,674 licences till date. While 22,457 NGOs continue to have FCRA clearance, around 6,702 organisations have expired license.

Foreign Contribution Regulation Act (FCRA), 2010

  • It seeks to regulate the foreign contributions or donations to organizations and individuals in India .
  • The Act aims to curb such contributions which might be detrimental to the national interest.
  • Any organisation, association or NGO in India cannot receive foreign funds if they do not have a license under the FCRA.
  • It falls under purview of the Home Ministry as it is an internal security legislation despite being a law related to financial regulation.
  • Salient Features of 2010 Act -
    • All funds received by a NGO must be used only for the purpose for which they were received.
    • Such funds must not be used in speculative activities identified under the Act.
    • It prohibits receipt of foreign contribution “for any activities detrimental to the national interest”. 
    • The government can refuse permission if it believes that the donation to the NGO will adversely affect “public interest” or the “economic interest of the state”.
    • Foreign contributions can be received after registering with the central government or taking  prior permission of the Central Government.
    • Under the Act, organisations are required to register themselves every five years.
    • For Registration under FCRA an Association:
      • must be registered (under the Societies Registration Act, 1860 or Indian Trusts Act 1882 or section 8 of Companies Act, 2013 etc.)
      • normally be in existence for at least 3 years.
      • has undertaken reasonable activity in its field for the benefit of the society.
      • Has spent at least Rs.10,00,000/- (Rs. ten lakh) over the last three years on its activities.
    • Foreign contribution cannot be accepted by any:

(a) a candidate for election;

(b) correspondent, columnist, cartoonist, editor, owner, printer or

publisher of a registered newspaper;

(c) Judge, government servant or employee of any Corporation or any

other body controlled on owned by the Government;

(d) member of any legislature;

(e) political party or office bearer thereof;

(f) Association or company engaged in the production or broadcast of audio news, audio visual news or current affairs programmes through any electronic mode

(g) Any other individuals or associations who have been specifically prohibited by the Central Government

  • No funds, other than foreign contribution shall be deposited in the FC (Foreign Contribution) account to be separately maintained by the associations etc.
  • Every bank shall report to such authority, as may be prescribed, the amount of foreign remittance received, sources and manner and other particulars.
  • Provision has been made for inspection of accounts if the registered person fails to furnish or the intimation given is not in accordance with law.
  • As per the amended FCRA rules -
    • NGOs now need to file their annual returns online, with the hard copy version dispensed with. 
    • The annual returns must be placed quarterly on the NGO’s website or the FCRA website maintained by the home ministry.

Image Source: Economic Times


After reading this article, answer the following question for Mains answer writing practice. Also you can get your answer checked free of cost by clicking on the following link.

For Mains:

Q) There cannot be a blanket ban on receiving of foreign funds under the Foreign Contribution (Regulation) Act, 2010. A regulatory mechanism to keep a watch on the financial activities of NGOs and voluntary organizations is the need of the hour. Discuss. (250 words)