NGO Regulation Under FCRA

• 28 Jan 2025

Source: HT 

Why in News? 

The Ministry of Home Affairs (MHA) warns NGOs using foreign funds without a valid FCRA license will face penalties under the FCRA, 2010 amended in 2020. 

What is Foreign Contribution Regulation Act? 

• About: The FCRA, enacted in 1976 during the Emergency, governs the acceptance and utilization of foreign contributions by individuals, associations, and organizations in India. 
  • It ensures that such contributions are used only for legitimate purposes and do not compromise national interest. 
• Amendments: It was amended in 2010 and 2020 to ensure transparency and prevent misuse of foreign contributions in India. 
• Validity and Renewal: FCRA registration is valid for five years, with NGOs needing to apply for renewal six months before expiry. 
• Amendments Made in 2020: 
  • Suspension: MHA is empowered to suspend an NGO's FCRA registration for up to 360 days if it is found in violation of the FCRA, 2010. 
    • Aadhaar identification was made mandatory for all office-bearers, directors, or key functionaries of NGOs. 
  • Bar on Public Servants: The amendment prohibits public servants from receiving foreign contributions. 
  • Administrative Expenses: NGOs are now restricted to using a maximum of 20% of foreign funds for administrative purposes. 
    • Earlier, they could use up to 50% for administrative expenses. 
  • Prohibition on Sub-Granting: NGOs receiving foreign funds are prohibited from transferring these funds to other NGOs or entities. 
  • Designated Bank Account: NGOs are required to open a designated FCRA account exclusively at a branch of the State Bank of India (SBI) in New Delhi. 
• Prohibited Activities: The applicant must not represent fictitious entities or engage in religious conversions. 
  • They should have no history of communal tension, disharmony, or seditious activities. 
  • The FCRA bars foreign funds for candidates, journalists, media, judges, government servants, politicians, and political organizations.