Foreign Contribution Regulation Act (FCRA)

Why in News?

The Union Home Ministry revoked the FCRA licence of Sonam Wangchuk’s SECMOL, citing violations like misclassification of funds and accepting foreign donations for projects linked to “national sovereignty”; CBI also probes his other NGO, HIAL, for similar violations.

Description:

• Enacted: 1976 (Emergency period) → to prevent foreign influence on India’s internal affairs.
• Current Law: FCRA, 2010 (replacing the 1976 Act).
• Administered by: Ministry of Home Affairs (MHA).

Objectives:

• Regulate acceptance & utilisation of foreign contributions and foreign hospitality.
• Ensure foreign funds are not used in a manner detrimental to sovereignty, integrity, and security of India.
• Maintain transparency and accountability in NGOs/associations receiving foreign donations.

Key Provisions of FCRA, 2010:

• Applicable to individuals, associations, companies receiving foreign contributions.
• Requires FCRA registration or prior approval from MHA.
• NGOs must submit annual returns and maintain prescribed accounts.

Foreign Contribution Regulation (Amendment) Act, 2020:

1. Prohibition on transfer of foreign contributions to any other individual/NGO.
2. Mandatory identification: Aadhaar (for Indian office bearers) / Passport/OCI card (for foreigners).
3. FCRA Account: All foreign funds to be received only in designated SBI branch, New Delhi.
4. Administrative expense cap reduced from 50% → 20%.
5. Renewal of licence: Government may conduct enquiry before renewal.
6. Suspension: Registration can be suspended for up to 180 + 180 days.
7. Surrender of certificate allowed with Govt. approval.
8. Govt. can restrict utilisation of unutilised funds pending inquiry.

FCRA Rules, 2022: Remittances from relatives abroad: limit raised to ₹10 lakh/year (earlier ₹1 lakh).

Need for FCRA:

• To prevent misuse of foreign funds for anti-national activities.
• Protect India’s sovereignty and internal security.
• Ensure NGOs’ activities are consistent with public interest and development goals.

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