HPAS/Allied Mains 2022 Answer Writing Challenge Day 09: Model Answer

Question: The Non-governmental organisations have come under increased scrutiny with the amendments made in the Foreign Contribution Regulation Act. What changes have been made as per the latest amendments to the act.  (8 marks, 120 words)

Answer: Introduction:

• The World Bank defines NGOs as not-for-profit organizations that pursue activities to relieve suffering, promote the interests of the poor, protect the environment, provide basic social services, or undertake community development.
• NGOs were first called such in Article 71 in the Charter of the newly formed United Nations in 1945

FCRA- Foreign Contribution (Regulation) Act

• The law sought to regulate foreign donations to individuals and associations so that they functioned “in a manner consistent with the values of a sovereign democratic republic”.
• Foreign funding under FCRA act and is implemented by Ministry of Home Affairs
• Ensure that the recipients of foreign contributions adhere to the stated purpose for which such contribution has been obtained.
• Under the act organisations require to register themselves every five years.

Major amendments to the FCRA

• An amended FCRA was enacted under the UPA government in 2010 to “consolidate the law” on utilisation of foreign funds, and “to prohibit” their use for “any activities detrimental to national interest”.
• The law was amended again by the current government in 2020, giving the government tighter control and scrutiny over the receipt and utilisation of foreign funds by NGOs.
• The foreign contribution must be received only in an account designated by the bank as FCRA account in such branches of the State Bank of India, New Delhi.

FCRA- key highlights of 2020 amendment

• No funds other than the foreign contribution should be received or deposited in this account.
• It allowed the government to restrict usage of unutilized foreign contribution. This may be done if, based on an inquiry the government believes that such person has contravened provisions of the FCRA
• While NGOs earlier could use up to 50 percent funds for administrative use, the new amendment restricted this use to 20 percent

FCRA- key highlights of 2020 amendment

• It bars public servants from receiving foreign contributions.
• It prohibits the transfer of foreign contributions to any other person.
• Aadhaar number is mandatory for all office bearers, directors or key functionaries of a person receiving foreign contribution, as an identification document (though Supreme Court later changed this provision)

FCRA requires every NGO seeking to receive foreign donations to be-

1. registered under the Act
2. to open a bank account for the receipt of the foreign funds in State Bank of India, Delhi,
3. to utilise those funds only for the purpose for which they have been received and as stipulated in the Act.
4. they are also required to file annual returns, and they must not transfer the funds to another NGO

Conclusion:

Adequate amount of regulation is certainly needed, yet they must be embedded in caution without choking the independent functioning of voluntary organisations like the NGOs. Foreign Contributions serve as medicine only till the time it is consumed moderately and discreetly, thus NGOs also should operate while keeping the sanctity of the law of the land.