FCRA Bill Concerns: Why FCRA Bill Concerns Over NGO Control and Government Powers Are Rising

FCRA Bill Concerns Latest News

• The Union government introduced the Foreign Contribution (Regulation) Amendment Bill, 2026 in the Lok Sabha to amend the existing FCRA, 2010, which regulates foreign funding received by NGOs and associations. 
• However, due to strong Opposition protests, discussion and passage of the Bill were deferred during the Budget Session.
• The Act requires organisations to obtain registration to receive foreign funds, aiming to ensure that such contributions do not harm national interest, public order, or national security. 
• Currently, around 16,000 registered associations receive nearly ₹22,000 crore annually under the FCRA framework.

Key Changes Proposed in the FCRA Amendment Bill, 2026

• The Bill introduces significant changes aimed at strengthening regulation, oversight, and accountability in the use of foreign funds by NGOs and associations.

Creation of a ‘Designated Authority’

• A major provision is the establishment of a designated authority with powers similar to a civil court. 
• This authority will:
  • Take over, manage, or dispose of assets created from foreign funds 
  • Act in cases where an NGO’s FCRA registration is suspended, cancelled, or not renewed 
  • Transfer or sell assets to the government or other entities 
• This addresses a gap in the 2010 Act, which lacked a clear statutory framework for handling such assets, leading to administrative uncertainty and potential misuse.

Expanded Definition of ‘Key Functionary’

• The Bill also widens the scope of accountability by expanding the definition of a ‘key functionary’. 
• It now includes: Trustees; Partners; Karta of a Hindu Undivided Family (HUF); Members of governing bodies;  Any person involved in controlling or managing the organization.
• These individuals will be held liable for FCRA violations, unless they can prove lack of knowledge or that they exercised due diligence.

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Additional Changes Proposed in the FCRA Amendment Bill, 2026

• The Bill introduces several procedural and legal changes aimed at tightening control over foreign funding and improving regulatory clarity.
• Centralised Approval for Investigations – The amendment to Section 43 requires that any law enforcement agency or State government must obtain prior approval from the Central government before initiating investigations into FCRA-related cases. This centralises oversight of enforcement actions.
• Timelines for Fund Utilisation and Permissions – The Bill introduces fixed timelines for the receipt and utilisation of foreign contributions under the ‘prior permission’ category (one-time approvals). This replaces the earlier open-ended framework, bringing greater clarity and accountability.
• Automatic Expiry of Registration – It provides for the automatic cessation of FCRA certificates if: The registration expires; Renewal is not obtained. This ensures stricter compliance with renewal requirements.
• Reduced Penal Provisions – The Bill proposes to reduce the maximum punishment for FCRA violations from five years to one year of imprisonment, signalling a shift towards relatively lighter penalties.

Regulation of Foreign Donations by MHA under FCRA

• MHA regulates foreign donations in India through the FCRA to ensure that such funds do not threaten internal security, public order, or national interest.
• Originally enacted in 1976, the law was replaced by a new framework in 2010 and has since been amended in 2016, 2018, and 2020 to strengthen oversight.
• Under the FCRA, NGOs must obtain registration valid for five years, after which renewal is mandatory. 
• Since 2015, the government has cancelled over 18,000 NGO registrations, reflecting stricter enforcement. 
  • As of April 3, around 14,965 NGOs remain registered under the Act.
• Registered organisations are allowed to receive foreign funds for activities related to social, educational, religious, economic, and cultural purposes, subject to regulatory compliance.

Opposition to the FCRA Amendment Bill, 2026

• Experts raised concerns over undue government interference in NGOs and minority institutions, especially provisions allowing cancellation of licences and takeover of assets, funds, and properties.
• Chief Ministers of Tamil Nadu and Kerala have also opposed the Bill, fearing it could be misused against minority institutions, including churches.

Source: TH | PRS