Foreign Contribution (Regulation) Act 2010 (FCRA)

Foreign Contribution (Regulation) Act 2010 (FCRA)

Subject: Polity

Context: During the last three years i.e. 2019 to 2021, the FCRA registration certificates of 1,811 associations have been cancelled under section 14 of The Foreign Contribution (Regulation) Act, 2010 (FCRA, 2010) due to violation of provisions of the FCRA, 2010.

• Suspension of FCRA licence means that the NGO can no longer receive fresh foreign funds from donors pending a probe by the Home Ministr
• The FCRA is mandatory for associations and NGOs to receive foreign funds.

About Foreign Contribution (Regulation) Act (FCRA), 2010 :

• Foreign funding of persons in India is regulated under FCRA act and is implemented by the Ministry of Home Affairs.
• Individuals are permitted to accept foreign contributions without permission of MHA. However, the monetary limit for acceptance of such foreign contributions shall be less than Rs. 25,000.
• The Act ensures that the recipients of foreign contributions adhere to the stated purpose for which such contribution has been obtained.
• Under the Act, organisations are required to register themselves every five years.
• Registered NGOs can receive foreign contributions for five purposes: Social, educational, religious, economic and cultural.

Foreign Contribution (Regulation) Amendment Act, 2020:

• Prohibition to accept foreign contribution: The Act bars public servants from receiving foreign contributions.
• Public servant includes any person who is in service or paid by the government, or remunerated by the government for the performance of any public duty.
• Transfer of foreign contribution: The Act prohibits the transfer of foreign contribution to any other person not registered to accept foreign contributions.
• Aadhaar for registration: The Act makes Aadhaar number mandatory for all office bearers, directors or key functionaries of a person receiving foreign contribution, as an identification document.
• FCRA account: The Act states that foreign contributions must be received only in an account designated by the bank as FCRA account in such branches of the State Bank of India, New Delhi.
• Reduction in use of foreign contribution for administrative purposes: The Act proposes that not more than 20% of the total foreign funds received could be defrayed for administrative expenses. In FCRA 2010 the limit was 50%.
• Surrender of certificate: The Act allows the central government to permit a person to surrender their registration certificate.