Foreign Contribution Regulation Act (FCRA)
The Foreign Contribution Regulation Act (FCRA) is a piece of Indian legislation that regulates how foreign contributions and hospitality are received and utilized by individuals, associations, and NGOs. The primary purpose is to safeguard India’s internal security and sovereignty from any potential influence.
Background and Origin
The FCRA was first enacted in 1976 during the Emergency period in India. It was comprehensively amended in 2010 to streamline the process and strengthen oversight. The latest amendments, introduced in 2020, have made the regulations around foreign donations even stricter.
Objectives of FCRA
The FCRA seeks to:
- Regulate the acceptance and usage of foreign funds.
- Ensure transparency and accountability in foreign contributions.
- Prevent foreign influence on India’s political, social, economic, or religious life.
Key Provisions of the Act
- FCRA Registration or Prior Permission is required to legally accept foreign funds.
- Separate Bank Account: Foreign funds must be received in a specific FCRA-designated account, usually with SBI, New Delhi branch.
- Annual Returns: Registered groups have to file yearly reports that detail where foreign contributions come from and how they’re used.
- Renewal: Registration must be renewed every 5 years.
- Audit: All records must be maintained and are subject to government audits.
Amendments and Reforms
FCRA Amendment Act, 2020
FCRA Amendment Act, 2020 – Key Changes:
- Reduced the cap on administrative expenses from 50% to 20%.
- Prohibited the transfer of foreign contributions from one NGO to another (sub-granting).
- Made Aadhaar mandatory for all directors or office-bearers of NGOs.
- Strengthened government oversight with increased powers to scrutinize, suspend, or cancel NGO registrations.