Approach:
- Introduction – mention the context.
- State briefly about FCRA.
- Elaborate on the requirements and any recent amendments made to the FCRA.
- Mention the cases of FCRA violations by NGOs and their subsequent cancellation.
- Conclusion
The Ministry of Home Affairs has removed some crucial data from the Foreign Contribution (Regulation) Act (FCRA) website. The information removed includes the annual returns of NGOs and a list of NGOs whose licences have been cancelled. For several years, FCRA clearances have been a fraught issue, and the government has often been accused of targeting NGOs for political or ideological reasons by cancelling or not renewing their clearances. Last year, the MHA had refused to renew the FCRA registration of Mother Teresa’s Missionaries of Charity, based on “adverse inputs”. The registration was, however, restored, and Missionaries of Charity’s FCRA certificate was made valid until the end of 2026.
What is the FCRA ?: 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”.
The law was amended by the current government in 2020, giving the government tighter control and scrutiny over the receipt and utilisation of foreign funds by NGOs.
Requirements under FCRA: Broadly, the FCRA requires every person or NGO seeking to receive foreign donations to be (i) registered under the Act, (ii) to open a bank account for the receipt of the foreign funds in State Bank of India, Delhi, and (iii) to utilise those funds only for the purpose for which they have been received and as stipulated in the Act. They are also 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 organisations of a political nature.
Recently, government increased the number of compoundable offences under the Act from 7 to 12, and exempted from intimation to the government for contributions less than Rs 10 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 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.
Issues with NGOs violating FCRA provisions:
- Several international well-known NGOs such as Compassion International, Greenpeace India, Sabrang Trust, Lawyers’ Collective, Amnesty International, and Ford Foundation had come under the government’s scanner for alleged violations of FCRA.
- Most have been accused of financial irregularities or “political activity” for cancellation of their registration. Amnesty was forced to shut its operation in India in 2020 following investigations launched by the Enforcement Directorate in 2018 into its financial dealings.
- Greenpeace India has scaled down its operations after its FCRA registration was cancelled in 2015 on grounds of opening multiple bank accounts, and movement of funds.
- Lawyer Indira Jaising’s NGO Lawyers’ Collective is facing a CBI probe. In 2016, the MHA had cancelled the FCRA licence of the NGO for allegedly using foreign contributions for “political purposes”.
- Activist Teesta Setalvad’s NGO Sabrang Trust had its FCRA registration cancelled in 2016 for allegedly mixing foreign and domestic funds, and for spending funds on publishing the Communalism Combat magazine.
- In April 2015, the MHA put the Ford Foundation under the “prior approval category”, which meant that all funds from the organisation to recipients in India would have to be cleared by the government. The international NGO was also put on the Home Ministry’s watch list for some time in the interest of “national security”.
- In 2016, Compassion International was barred by the government from funding NGOs in India over allegations of conversion.
Until 2011, there were more than 40,000 NGOs registered under FCRA in India. That number now stands at 16,000. Over the past few years, the government has faced allegations of targeting NGOs. Over 10,000 cancellations were carried out in 2015.