Foreign Contribution Regulation Act

About Foreign Contribution (Regulation) Act:

• It is a law enacted by Parliament to regulate foreign contributions (especially monetary donations) provided by certain individuals or associations to NGOs and others within India.
• The FCRA was originally enacted in 1976, and significantly revised in 2010. 
• The Act falls under the purview of the Ministry of Home Affairs (MHA).
• ‘Foreign Contribution’means the donation, delivery, or transfer made by any foreign source of any:
  • Any article (not being an article given to a person as a gift for his/her personal use, the market value of which is not more than one lakh rupees);
  • Any currency, whether Indian or foreign.
  • Any security, including foreign security.
• This will also cover:
  • Contribution received from any person who has in turn received it from a foreign source.
  • Interest accrued on foreign contributions deposited in the bank
• It creates registration requirements and spending restrictions on Indian nonprofit organizations receiving foreign donations. 
• The Act aims to prevent foreign organisations from influencing electoral politics, social, political, economic, or religious discussions in India for wrong purposes and activities detrimental to the public interest. 
• Contributionsmade by a citizen of India living in another country (e.g., a Non-Resident Indian (NRI)) from his/her personal savings through the normal banking channels, will not be treated as foreign contributions. 
• Who can Receive Foreign Contributions? Any person can receive a foreign contribution provided:
  • The person has a definite cultural, economic, educational, religious, or social programme;
  • The person must have obtained FCRA registration/prior permission from the Central Government and
  • Person includes
    • an individual;
    • a Hindu Undivided Family;
    • an association;
    • a company registered under Section 8 of the Companies Act, 2013;
    • The foreign contribution received has to be utilised only for the purpose for which it has been received, and not more than 20% of the foreign contribution received in a financial year can be utilised to defray administrative expenses.
    • The FCRA requires every person or NGO seeking to receive foreign donations to open a bank account for the receipt of foreign funds in the State Bank of India, Delhi.
    • Registration under FCRA: The FCRA is applicable to all associations, groups and NGOs which intend to receive foreign donations.
• It is mandatory for all such NGOs to register themselves 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.
• The registration is initially valid for five years, and it can be renewed subsequently if they comply with all norms. 
• Registered associations can receive foreign contribution for social, educational, religious, economic, and cultural purposes.
• Registration can be cancelled if an inquiry finds a false statement in the application.
• Once the registration of an NGO is cancelled, it is not eligible for re-registration for three years.
• The ministry also has the power to suspend an NGO’s registration for 180 days pending inquiry, and can freeze its funds.
• All orders of the government can be challenged in the High Court.

Q1: What is an NGO?

A non-governmental organization (NGO) is a group that functions independently of any government. It is usually non-profit. NGOs, sometimes called civil society organizations, are established on community, national, and international levels to serve a social or political goal such as a humanitarian cause or the protection of the environment.

News: No FCRA for NGOs linked to conversions, radical groups: Govt

‹ ›