Why in News?
- Recently, the Ministry of Home Affairs suspended the Foreign Contribution Regulation Act licence of the Centre for Policy Research (CPR).
- CPR (not-for-profit society), together with Oxfam India and the Independent and Public-Spirited Media Foundation (IPSMF), was surveyed by the Income Tax department earlier.
About Foreign Contribution Regulation Act-
- The FCRA was enacted in 1976 to regulate foreign donations into the country through independent organizations.
- In 2010, The Foreign Contribution Regulation Act (FCRA) was amended by the Parliament to effectively regulate the foreign contribution by individuals or associations or companies.
- The Minister of Home Affairs introduced the Foreign Contribution (Regulation) Amendment Bill in 2020, which made many changes.
- Provisions of the Act-
- Every person or NGO wishing to get foreign donations to be registered under the Act.
- To open a bank account for the receipt of the foreign funds/contributions in State Bank of India (SBI), Delhi.
- Utilise those funds only for the purpose for which they have been received, and as stipulated in the Act.
- NGOs are also required to file annual returns, and they must not transfer the funds to another NGO.
- The Act prohibits receipt of foreign funds by candidates for elections, judges and government servants, journalists or newspaper and media broadcast companies, members of legislature and political parties or their office-bearers, and organisations of a political nature.
- Registration under FCRA-
- NGOs that want to receive foreign funds must apply online in a prescribed format with the required documentation.
- The registrations are granted to individuals or associations that have definite cultural, economic, educational, religious, and social programmes.
- Post application, the MHA makes inquiries through the Intelligence Bureau into the antecedents of the applicant, and accordingly processes the application.
- The MHA is required to accept or reject the application within 90 days- failing which it is expected to notify the NGO of the reasons for the same.
How FCRA regulates NGO funding?
- FCRA regulates foreign donations and make sure that such contributions do not adversely affect the internal security of the country.
- The Act was enacted in 1976 and was amended in the year 2010 and then 2020.
- Section 5 of the Foreign Contribution (Regulation) Act, 2010 provides the Union government “unchecked and unbridled powers” to declare an organisation as being one of political nature and refuse it access to funds from sources abroad.
- FCRA is implemented by the Ministry of Home Affairs (MHA).
Applicability-
- The provisions of the Act apply to the territory of India, to citizens of India who may be outside India and to companies or their branches outside India that are registered or incorporated in India.
- The entities covered by the Act involve an individual, a Hindu undivided family, an association or a registered company.
For how long is approval granted?
- Once granted, FCRA registration is valid for 05 years. NGOs are expected to apply for renewal within 06 months of the date of expiry of registration.
- In case of failure to apply for renewal, the registration is deemed to have expired and the NGO is no longer permitted to receive foreign funds or utilise its existing funds without permission from the ministry.
FCRA 2022 Rules-
- In July 2022, the MHA effected changes to FCRA rules which raised the number of compoundable offences under the Act from 07 to 12.
- The other major changes were exemption from intimation to the government for contributions of less than Rs 10 lakh – the previously limit was Rs 01 lakh, received from relatives abroad, and increase in time limit for intimation of opening of bank accounts.
Prior Reference Category under the Act-
- It implies that to donate/contribute to such an NGO, a foreign donor has to take prior approval from the Ministry of Home Affairs.
Cancellation of approval-
- The government reserves the right to cancel the FCRA registration of any NGO if it finds it to be in violation of the Act.
- Registration can be cancelled for many reasons- If in the opinion of the Central Government, it is mandatory in the public interest to cancel the certificate.
- Once the registration of an NGO is cancelled, it is not eligible for re-registration for 03 years.
- Further, All orders of the government can be challenged in the High Court.