Cancellation of FCRA Registration of NGOs | 25 Jan 2024
For Prelims: Foreign Contribution Regulation Act, NGOs, Companies Act, 2013, Indian Trusts Act, 1882, Societies Registration Act, 1860, NGO-DARPAN Platform.
For Mains: Regulation of NGOs in India, Major Provisions of FCRA.
Why in News?
The cancellation of Foreign Contribution Regulation Act, 2010 (FCRA) registrations for two prominent non-governmental organisations (NGOs) - the Centre for Policy Research (CPR) and World Vision India (WVI) - has sparked discussions about the regulatory landscape governing foreign contributions in India.
What led to the Cancellation of the Registrations of CPR and WVI?
- The Ministry of Home Affairs (MHA) accused CPR of redirecting foreign donations to support protests and legal challenges against development projects, claiming misuse of funds to impact India's economic interests.
- The allegation includes the violation of FCRA norms through the production of current affairs programs, citing CPR's report on air pollution as an example.
- The MHA asserts that publishing such programs with foreign funds contravenes Section 3 of the FCRA.
- The allegation includes the violation of FCRA norms through the production of current affairs programs, citing CPR's report on air pollution as an example.
- Additionally, the registration of World Vision India was revoked for alleged FCRA violations spanning from 2012-13 to 2020-21.
- WVI is the recipient of the highest amount of foreign donations among all NGOs registered under the Act in 1986.
What is the FCRA?
- About: The FCRA was enacted in 1976 during the Emergency period due to concerns about foreign interference in India's affairs through financial support to independent organisations.
- It was designed to regulate foreign donations to prevent any adverse impact on internal security, ensuring alignment with the principles of a sovereign democratic republic.
- Evolution of FCRA:
- 2010 Amendment: Enacted to streamline regulations governing the acceptance and use of foreign contributions by specific individuals or associations, and to forbid such contributions for activities harmful to national interests.
- 2020 Amendment:
- Providing Aadhaar numbers of all key functionaries of NGOs, receipt of foreign contribution only through designated FCRA bank accounts with the State Bank of India
- Complete ban on domestic transfer of foreign funds
- Reduction of administrative expense limit from 50% to 20%
- Applicability: FCRA mandates registration for all associations, groups, and NGOs intending to receive foreign donations.
- Initially valid for 5 years with the possibility of renewal upon compliance with prescribed norms.
- Purposes of Foreign Contributions: Registered associations can receive foreign contributions for social, educational, religious, economic, and cultural purposes.
- Monitoring Authority: Ministry of Home Affairs
- In 2015, the MHA mandated NGOs to operate accounts in banks with core banking facilities for real-time security access.
- In 2023, the MHA amended rules for FCRA-registered NGOs, now necessitating the disclosure of assets created using foreign funds in their annual returns.
How NGOs are Regulated in India?
- About:
- As defined by the World Bank, NGOs refers to not-for-profit organisations that pursue activities to relieve suffering, promote the interests of the poor, protect the environment, provide basic social services, or undertake community development.
- However, the term NGO in India denotes a wide spectrum of organisations which may be non-governmental, quasi or semi governmental, voluntary or non-voluntary etc.
- As defined by the World Bank, NGOs refers to not-for-profit organisations that pursue activities to relieve suffering, promote the interests of the poor, protect the environment, provide basic social services, or undertake community development.
- Registration and Regulation: Majorly, NGOs can register as either trusts, societies, or companies under Section 8 of the Companies Act, 2013. Each form has its own set of rules and regulations for registration and governance.
- Trusts: Governed by the Indian Trusts Act, 1882, or equivalent state laws, requiring registration with the Charity Commissioner's office.
- Societies: Registered under the Societies Registration Act, 1860, or its state-specific variations, with the Registrar of Societies.
- Section 8 Companies: Registered similar to commercial companies but with non-profit objectives.
- NGO-DARPAN Platform: It provides space for interface between NGOs and Central Ministries / Departments / Government Bodies.
- This is a free facility offered by the NITI Aayog in association with National Informatics Centre to bring about greater partnership between government & voluntary sector and foster better transparency, efficiency and accountability.
UPSC Civil Services Examination, Previous Year Question:
Mains
Q. Can Civil Society and Non-Governmental Organisations present an alternative model of public service delivery to benefit the common citizen? Discuss the challenges of this alternative model. (2021)