NGOs told to declare assets acquired with foreign funds

Subject: Polity

Section: Msc

Context: The Ministry of Home Affairs (MHA) has issued a gazetted notification, amending the Foreign Contribution Regulation Act (FCRA) rules.

More about the news:

The Ministry of Home Affairs has issued a gazetted notification, amending the Foreign Contribution Regulation Act (FCRA) rules after mandating NGOs with FCRA licence to submit details of movable and immovable assets created out of foreign contributions.
Under the new rules, political parties, legislature members, election candidates, judges, government servants, journalists and media houses among others – all barred from receiving foreign contribution – will no longer be prosecuted if they receive foreign contribution from relatives abroad and fail to intimate the government within 90 days.

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 organisations.
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.