FOREIGN CONTRIBUTION REGULATING ACT (Syllabus: GS Paper 3 – Economy)

Context: The Centre for Policy Research recently faced a significant setback as it received a final order cancelling its licence under the Foreign Contribution Regulation Act (FCRA), resulting in "choked" funding, a "skeletal" staff strength, and programming reduced to a bare "minimum."

Foreign Contribution Regulation Act (FCRA)

• About: Enacted during the Emergency in 1976, FCRA emerged amid concerns that foreign powers were meddling in India’s affairs by channeling funds through independent organizations.
• Regulating Foreign Donations: The law aimed to regulate foreign donations to individuals and associations, ensuring they operated in a manner consistent with the values of a sovereign democratic republic.
• 2010 Amendment: In 2010, FCRA underwent an amendment to "consolidate the law" on utilizing foreign funds and "prohibit" their use for "any activities detrimental to national interest."
• 2020 Amendment: Further amendments in 2020 granted the government increased control and scrutiny over the receipt and utilization of foreign funds by NGOs.
• Criteria: To receive foreign donations, individuals or NGOs must be registered under the FCRA, open a designated bank account in the State Bank of India, Delhi, and utilize the funds only for the specified purpose outlined in the Act.
• Granting Registrations: FCRA registrations are awarded to individuals or associations with specific cultural, economic, educational, religious, and social programs.