The Lok Sabha passed the Foreign Contribution (Regulation) Amendment (FCRA) Bill 2020 on 21 September, changing rules regarding funds for Indian NGOs from foreign while tightening the existing laws.
Crux of the Matter
If you want to know how NGOs function in India, read this interesting and simplified piece on NGOs in India: Understanding NGOs In India
On 21 September 2020, the Foreign Contribution (Regulation) Amendment (FCRA) Bill 2020 was passed in the Lok Sabha. The bill would amend the Foreign Contribution (Regulation) Act, 2010. In its statement, the Government claimed that the laws are “not against NGOs” and only seek to “stop misuse of foreign contributions by people”.
The Bill would do the following if passed by the Rajya Sabha and the President:
- Prohibit “public servants” and “corporations owned or controlled by the government” from receiving funds from outside India.
- Reduce the maximum limit for expenditure on administration to 20% of the total foreign funding from the earlier limit of 50%.
- Allow the Government to stop the use of funds for offenders by holding a “summary inquiry”. Previously, the action was taken only after the entity was “found guilty” of breaching the laws.
- Ban the transfer of “grants” obtained under FCRA to “any other person or organisation”.
- Foreign funds would be transferred only to ‘‘FCRA Accounts” in SBI Banks in New Delhi for people granted permission under section 12. However, provision to open more accounts in other banks to utilize the funds is present in the bill.
- Aadhaar cards would be made compulsory for “all office-bearers, directors and other key functionaries of NGOs or associations eligible to receive foreign donations”.
- Allow Government to cancel the FCRA certificate of an entity for more than 180 days (earlier limit).
The Home Ministry noted the alleged misuse of foreign funds by organizations like Greenpeace, Amnesty International, Citizen for Justice and Peace (CJP), etc. In the amendment, it has been claimed that the “annual inflow of foreign contribution has almost doubled between the years 2010 and 2019, but many recipients of foreign contribution have not utilised the same for the purpose for which they were registered”.
- Critics claim that the Bill is designed to discourage foreign funding for social work in India by making the process more complex and binding.
- They also brought the issue of the PM Cares Fund which has been exempted from FCRA.
The most severe criticism of the decision has come for political parties which are still exempted from the FCRA.
- 2014: Delhi High Court found BJP and Congress guilty of receiving foreign funding.
- 2016: Government changed the definition of Foreign companies – claimed that any firm having less than 50% of “share capital” held by foreign entities would be Indian.
- 2018: Foreign Contribution (Regulation) Act (FCRA) was amended with a ‘retrospective effect’, with the foreign funds received by political parties since 1976 being freed from supervision.
- Advocacy groups, also known as special interest groups, use various forms of advocacy in order to influence public opinion and ultimately policy. They play an important role in the development of political and social systems. Groups such as these have secured the nature of their influence by gaining status as nongovernmental organisations (NGOs).
- The Servants of India Society was formed in Maharashtra, in 1905 by Gopal Krishna Gokhale. The Society organized many campaigns to promote education, sanitation, health care and fight the social evils of untouchability and discrimination, alcoholism, poverty, oppression of women and domestic abuse.
- Ashoka is an international organization that promotes social entrepreneurship by affiliating individual social entrepreneurs into the Ashoka organization. Each Ashoka fellow receives a financial stipend that the fellow can use to pay for their personal expenses so that they can fully devote their time in pursuit of innovative social ideas.
- The Print – Modi govt tables FCRA amendments, opposition & NGOs call it fatal blow to civil society work
- The Economic Times – Govt set to amend FCRA; Aadhar to be mandatory for registration
- PRS – The Foreign Contribution (Regulation) Amendment Bill, 2020
- The Wire – The Proposed FCRA Amendment Will Deal Another Blow to India’s Non-Profit Sector
- The Hindu – PM CARES: Entitled to give any non-political organisation FCRA exemption, says Home Ministry
- BOOM – Foreign Funding For Political Parties: All You Need To Know