FCRA
- GOVERNANCE
News:
After a record 1,111 NGOs
got FCRA nod in 2023, 30 get clearance in January
What's
in the news?
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A Taiwan-headquartered Buddhist monastic
order in Delhi has been granted clearance under the Foreign Contribution
(Regulation) Act (FCRA), 2010, enabling the organisation to receive foreign
funds.
Key
takeaways:
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In all, 30 Non-Government Organisations (NGOs) and associations have been
granted FCRA registration in the first month of the year.
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Last year, a record number of 1,111 NGOs
were granted permission to receive foreign donations, the highest since 2014.
Registration
for NGOs:
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Registration under FCRA is mandatory to receive foreign donations.
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The NGO
must have a definite cultural, economic, educational, religious or social
programme to get registered.
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According to data available with the
Ministry, as many as 3,294 associations were granted fresh registration from
2014 to 2023.
FCRA:
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The FCRA was enacted during the Emergency
in 1976 amid apprehensions that
foreign powers were interfering in India’s affairs by pumping money into the
country through independent organisations.
●
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”.
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An amended
FCRA was enacted under the UPA government in 2010 to “consolidate the law” on utilization of foreign funds, and
“to prohibit” their use for “any activities detrimental to national interest”.
Registration
under FCRA:
●
FCRA registrations are granted to
individuals or associations that have definite cultural, economic, educational,
religious and social programmes.
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Under the FCRA, the applicant
○
should
not be fictitious or benami.
○
should not have been prosecuted or
convicted for indulging in activities aimed at conversion through inducement or
force, either directly or indirectly, from one religious faith to another.
○
should
not have been prosecuted for or convicted of creating communal tension or
disharmony.
○
should not have been found guilty of
diversion or misutilisation of funds.
○
should not be engaged or likely to be
engaged in the propagation of sedition.
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The MHA is required to approve or reject
the application within 90 days. In case of failure to process the application
in the given time, the MHA is expected to inform the NGO of the reasons for the
same.
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Once
granted, FCRA registration is valid for five years.
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NGOs are expected to apply for renewal within six months of the date of expiry of
registration.
Cancellation
of license:
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In case of failure to apply for renewal,
the registration is deemed to have expired, and the NGO is no longer entitled
to receive foreign funds or utilize its existing funds without permission from
the ministry.
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The
government reserves the right to cancel the FCRA registration of any NGO if it
finds it to be in violation of the Act.
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Registration can be cancelled
○
if an inquiry finds a false statement in
the application.
○
if the NGO is found to have violated any
of the terms and conditions of the certificate or renewal.
○
if it has not been engaged in any
reasonable activity in its chosen field for the benefit of society for two
consecutive years.
○
if it has become defunct.
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It can also be cancelled if “in the opinion of the Central Government, it
is necessary in the public interest to cancel the certificate”.
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Registrations are also cancelled when an
audit finds irregularities in the finances of an NGO in terms of misutilisation
of foreign funds.
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Once
the registration of an NGO is cancelled, it is not eligible for re-registration
for three years.
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The
ministry also has powers to suspend an NGO’s registration for 180 days pending
inquiry, and can freeze its funds.
Appeal
against cancellation:
●
According to FCRA, no order of
cancellation of certificate can be made unless the person or NGO concerned has
been given a reasonable opportunity of being heard.
●
All orders of the government can be
challenged in the High Court.
Recent
Amendment:
The law was amended again by the current
government in 2020, giving the government tighter control and scrutiny over the
receipt and utilization of foreign funds by NGOs. The FCRA requires every
person or NGO seeking to receive foreign donations to be
●
Registered under the Act.
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To open a bank account for the receipt of
the foreign funds in State Bank of India, Delhi.
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To utilise those funds only for the
purpose for which they have been received and as stipulated in the Act.
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Required to file annual returns, and they
must not transfer the funds to another NGO.
The Act prohibits the
receipt of foreign funds by candidates for elections, journalists or newspaper
and media broadcast companies, judges and government servants, members of
legislature and political parties or their office-bearers, and organizations of
a political nature.
New
rules:
●
MHA
effected changes to FCRA rules through two gazette notifications and increased the number of compoundable
offences under the Act from 7 to 12.
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The other key changes were exemption from
intimation to the government for contributions less than Rs 10 lakh – the
earlier limit was Rs 1 lakh - received from relatives abroad, and increase in
time limit for intimation of opening of bank accounts.
●
Under the new rules, political parties, legislature members, election candidates, judges,
government servants, journalists and media houses among others - all barred
from receiving foreign contribution - will no longer be prosecuted if they
receive foreign contribution from relatives abroad and fail to intimate the
government within 90 days. However, the recipient will be required to pay 5% of
the foreign contribution received.