FCRA ACT (Syllabus GS Paper 2/3 – NGOs/Economy)

Context: The Union Home Ministry recently cancelled the registration of at least five non-governmental organizations (NGOs) under the Foreign Contribution (Regulation) Act (FCRA) for alleged violation of various provisions.

Foreign Contribution (Regulation) Act (FCRA)

• About: Regulates the receiving and use of foreign contributions by individuals and corporations established in India. The Foreign Contribution (Regulation) Act, 2010 has come into effect from 2011.
• Objectives: 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.
• Extend to: It extends to the whole of India.
• FCRA registration granted to NGO:

oApply online: NGOs that want to receive foreign funds must apply online in a prescribed format with the required documentation. 

oInquiry and process of application:  Following the application by the NGO, the MHA makes inquiries through the Intelligence Bureau into the antecedents of the applicant, and accordingly processes the application.

oShould not involve in illegal activity: Under the FCRA, the applicant should not be fictitious or benami; and 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.

• Validity: Once granted, FCRA registration is valid for five years. 
• Renewal: NGOs are expected to apply for renewal within six months of the date of expiry of registration. 
• Expiry: 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 utilise its existing funds without permission from the ministry.

Foreign Contribution (Regulation) Amendment Rules, 2022 

• Threshold limit Increased: Any person receiving a foreign contribution over Rs. 1 Lakh in a financial year from any of his relatives shall inform the Central Government in within 30 days from the date of receipt of such contribution.

o(The FCRA Amendment Rules 2022 has increased the limit to Rs. 10 Lakh from the existing limit of Rs. 1 Lakh)

• Time Limit increased: The time limit to intimate the receipt of a foreign contribution from relatives to the Central Government is increased to 3 months from the existing time limit of 30 days.