FOREIGN CONTRIBUTION REGULATION ACT (FCRA).

Why in News

• The Supreme Court asked 6,000-odd NGOs to go back to the government for redressal of their grievances on non-renewal of their Foreign Contribution Regulation Act (FCRA) registration.
• NGO Global Peace Initiative had petitioned the court that the NGOs should be allowed to continue receiving and utilising foreign funds until the pandemic is over.

Background

• The registration of thousands of NGOs was up for renewal in 2020-21. The Ministry had declined to renew the FCRA registration of 179 NGOs, while 5,789 associations did not apply for a renewal before the December 31 deadline.
• After the exercise, the number of active FCRA-registered NGOs is down from 22,762 to 16,907.

Why Registration approval cancelled?

• The government reserves the right to cancel the FCRA registration of any NGO if it finds it to be in violation of the Act.
• Registration can be cancelled if an inquiry finds a false statement in the application.
• It can also be cancelled if “in the opinion of the Central Government, it is necessary in the public interest to cancel the certificate”.
• Registrations are also cancelled when an audit finds irregularities in the finances of an NGO in terms of misutilisation of foreign funds.

How FCRA regulates NGO funding?

• FCRA regulates foreign donations and ensures that such contributions do not adversely affect the internal security of the country.
• The Act, first enacted in 1976 was amended in the year 2010 and then 2020.
• Section 5 of the Foreign Contribution (Regulation) Act, 2010 gives the Union government “unchecked and unbridled powers” to declare an organisation as being one of political nature and deny it access to funds from sources abroad.
• FCRA is implemented by the Ministry of Home Affairs.

Recent changes in FCRA

• Earlier, as per the FCRA 2010, only applicants such as directors who sought permission to receive foreign funds were required to make such a declaration.
• It has been made mandatory for office bearers and key functionaries and members to certify that they have not been “prosecuted or convicted” for “conversion” from one faith to another and for creating “communal tension and disharmony”.
• The Centre has amended in 2020 the Foreign Contribution (Regulation) Act and made Aadhaar a mandatory identification document for all the office-bearers, directors and other key functionaries of an NGO or an association eligible to receive foreign donations.
• The public servant and corporation owned or controlled by the government are among the list of entities who are not eligible to receive foreign donations.
• It also says that not more than 20% of the total foreign funds received could be defrayed for administrative expenses. Earlier the limit was 50%.

Who Cannot Receive Foreign Contribution?

• A host of entities are barred from receiving foreign funds, including election candidates, those connected with a registered newspaper, judges, government servants or employees of any entity controlled or owned by the government and members of any legislature.
• Political parties and their office bearers, too, are prohibited from receiving foreign funds.

About FCRA

• Government of India enacted the Foreign Contribution (Regulation) Act (FCRA) in the year 1976 with an objective of regulating the acceptance and utilisation of foreign contribution.
• The legislation aims to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or companies.
• It aims to prohibit funding for any activities detrimental to the national interest and for matters connected therewith.
• The act was majorly modified in 2010 with several amendments because many NGOs were found using illegal use of foreign funding.