Context: The Foreign Contribution (Regulation) Act came into being originally in 1976 to largely gauge and safeguard the societal, community, political, economic, and religious domains from the foreign interests, their impact, and interference. This law was slightly tweaked in 1984 by making the registration of the organisations engaged in non-profit activities as mandatory for being eligible to receive any foreign funding. The Act was then passed in the Lok Sabha on 21 st September 2010 and in the

• Rajya Sabha on 23 rd September 2010. The Act received the assent of the President on 26 th September 2010, and it came into force on 1 st May, 2011.

Foreign Contribution (Regulation) Act (FCRA), 2010

• Foreign funding of persons in India is regulated under FCRA Act and is implemented by the Ministry of Home Affairs.
• Individuals are permitted to accept foreign contributions without permission of MHA. However, the monetary limit for acceptance of such foreign contributions shall be less than Rs. 25,000.
• The Act ensures that the recipients of foreign contributions adhere to the stated purpose for which such contribution has been obtained.
• Under the Act, organisations are required to register themselves every five years.

Foreign Contribution (Regulation) Amendment Act, 2020

• Prohibition to accept foreign contribution: The Act bars public servants from receiving foreign contributions. Public servant includes any person who is in service or pay of the government, or remunerated by the government for the performance of any public duty.
• Transfer of foreign contribution: The Act prohibits the transfer of foreign contribution to any other person not registered to accept foreign contributions.
• Aadhaar for registration: The Act makes Aadhaar number mandatory for all office bearers, directors or key functionaries of a person receiving foreign contribution, as an identification document.
• FCRA account: The Act states that foreign contribution must be received only in an account designated by the bank as FCRA account in such branches of the State Bank of India, New Delhi.
• Reduction in use of foreign contribution for administrative purposes: The Act proposes that not more than 20% of the total foreign funds received could be defrayed for administrative expenses. In FCRA 2010 the limit was 50%.
• Surrender of certificate: The Act allows the central government to permit a person to surrender their registration certificate.

Reasons for FCRA Regulations

• The annual inflow of foreign contribution has almost doubled between the years 2010 and 2019, but many recipients of foreign contribution are being not utilised the same for the purpose for which they were registered or granted prior permission under amended provisions of the FCRA 2010.
• Recently, the Union Home Ministry has suspended licenses of the six (NGOs) who were alleged to have used foreign contributions for religious conversion.
• To ensure that such contributions do not adversely affect the internal security of the country.
• Recently the National Investigation Agency (NIA) registered a case against a foreign based group that provides funds for secessionist and pro-Khalistani activities in India.
• These regulations could enhance transparency and accountability in the receipt and utilisation of foreign contributions.

Controversies Related to FCRA

• Scope not defined: It prohibits the receipt of foreign contributions “for any activities detrimental to the national interest” or the “economic interest of the state”.
• However, there is no clear guidance on what constitutes “public interest”.
• Limits Fundamental Rights: The FCRA restrictions have serious consequences on both the rights to free speech and freedom of association under Articles 19(1)(a) and 19(1)(c) of the Constitution.

Road Ahead

• NGOs are helpful in implementing government schemes at the grassroots. They fill the gaps, where the government fails to do their jobs.
• The government must stick to the ancient Indian ethos of Vasudhaiva Kutumbakam as the framework for its global engagement and should not act with vendetta against the NGOs who criticize its working.
• Seamless sharing of ideas and resources across national boundaries is essential to the functioning of a global community, and should not be discouraged unless there is reason to believe the funds are being used to aid illegal activities.