Centre opposes CPR petition to allow using part of fund in FD

Subject :Polity

Section: legislation in news

Context: Centre opposes CPR petition to allow using part of funds in FD

More about the news:

The government expressed its disagreement with the Centre for Policy Research (CPR) understanding of the release of 25% of funds that were not used concerning fixed deposits.
This disagreement arose during a hearing at the Delhi High Court where CPR challenged the suspension of its registration certificate under the Foreign Contribution Regulation Act (FCRA).
The Ministry of Home Affairs had frozen CPRs accounts following a suspension order.
The main point of contention revolves around how “in his custody” is interpreted in Section 13(2)(b) of FCRA.
CPR argues that this includes funds that one has control or dominion over, like fixed deposits.
On the other hand, the government maintains that fixed deposits should not be considered as amounts.

What is FCRA:

The law sought to regulate foreign donations to individuals and associations so that they functioned in a manner consistent with the values of a sovereign democratic republic.
The law was enacted during the Emergency in 1976 amid apprehension that foreign powers were interfering in India’s affairs by pumping in funds through independent organizations.
It is implemented by the Union Home Ministry

What are the provisions of the act:

The FCRA requires every person or NGO seeking to receive foreign donations to be
- To be registered under the Act
- To open a bank account for the receipt of the foreign funds in State Bank of India, Delhi
- To utilize those funds only for the purpose for which they have been received and as stipulated in the Act
- To file annual returns and not to transfer the funds to another NGO

How is FCRA registration granted:

FCRA registrations are granted to individuals or associations that have definite cultural, economic, educational, religious, and social programmes.
NGOs that want to receive foreign funds must apply online with the required documentation.
Authority– The Ministry of Home Affairs makes inquiries through the Intelligence Bureau into the antecedents of the applicant and approves or rejects the application within 90 days.
In case of failure to process the application in the given time, the MHA is expected to inform the NGO of the reasons for the same.
Eligibility- Under the FCRA, the applicant
- Should not be fictitious or benami
- 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
- Should not have been prosecuted for or convicted of creating communal tension or disharmony
- Should not have been found guilty of diversion or misutilisation of funds
- Should not be engaged or likely to be engaged in the propagation of sedition
Validity– Once granted, FCRA registration is valid for five years and NGOs are expected to apply for renewal within six months of the date of expiry of registration.
In case of failure to apply for renewal, the registration is deemed to have expired.