Foreign Contribution Regulation Act 2010 (FCRA) | UPSC
Foreign funds & NGOs
WHY IN NEWS:
How does the Foreign Contribution (Regulation) Act control donations? Who comes under its ambit?
SYLLABUS COVERED: GS 2 : Acts : Internal Security
For PRELIMS go through this act carefully . It stands important till today !
For MAINS why FCRA has always been in controversies ? Can you mention few lacunae ? Let us dive in !
- Their FCRA certificates were suspended and bank accounts frozen.
- The Ministry of Home Affairs (MHA) said it had received serious adverse inputs.
- The working of several NGOs which come under the ambit of the FCRA in tribal areas.
FOREIGN CONTRIBUTION REGULATION ACT
WHAT IS THE FCRA?
- DEFINITION : The FCRA regulates foreign donations and ensures that such contributions do not adversely affect internal security.
- ENACTMENT : First enacted in 1976, it was amended in 2010 when a slew of new measures were adopted to regulate foreign donations.
- APPLICATION : The FCRA is applicable to all associations, groups and NGOs which intend to receive foreign donations.
- REGISTRATION : It is mandatory for all such NGOs to register themselves under the FCRA.
- CONTRIBUTION : Registered associations can receive foreign contribution for social, educational, religious, economic and cultural purposes.
- TAX NETS : Filing of annual returns, on the lines of Income Tax, is compulsory.
- AMENDMENTS : In 2015, the MHA notified new rules, which required NGOs to give an undertaking that the acceptance of foreign funds is not likely to prejudicially affect the sovereignty and integrity of India.
- BANKING : It also said all such NGOs would have to operate accounts in either nationalised or private banks which have core banking facilities to allow security agencies access on a real time basis.
WHO CANNOT RECEIVE FOREIGN DONATIONS?
- OUT OF SCOPE : Members of the legislature and political parties, government officials, judges and media persons are prohibited from receiving any foreign contribution.
- REPEALED FCRA : However, in 2017 the MHA amended the 1976-repealed FCRA law paving the way for political parties to receive funds from the Indian subsidiary of a foreign company or a foreign company in which an Indian holds 50% or more shares.
ALTERNATE WAYS OF RECEIVE FOREIGN FUNDS?
- PRIOR PERMISSION : It is granted for receipt of a specific amount from a specific donor for carrying out specific activities or projects.
- DOCUMENTS NEEDED : A letter of commitment from the foreign donor specifying the amount and purpose is also required.
- INITIAL SUSPENSION : The MHA on inspection of accounts and on receiving any adverse input against the functioning of an association can suspend the FCRA registration initially for 180 days.
- NOTICE PERIOD : Until a decision is taken, the association cannot receive any fresh donation.
- WITHHOLDING ACCOUNT : They cannot utilise more than 25% of the amount available in the designated bank account without permission of the MHA.
- CANCELLATION : The MHA can cancel the registration of an organisation which will not be eligible for registration.
SUSPENSIONS IN THE PAST
- SUSPENSIONS : According to MHA data, since 2011, the registration of 20,664 associations was cancelled for violations such as misutilisation of foreign contribution.
- TOTAL REGISTRATIONS : As on September 11, there are 49,843 FCRA-registered associations.
- The Foreign Contribution (regulation) Act, 2010 is an act of the Parliament of India, by the 42nd Act of 2010.
- It is a consolidating act whose scope is to regulate the acceptance and utilisation of foreign contribution or foreign hospitality .
- The act is to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest .
- It is designed to correct shortfalls in the predecessor act of 1976.