What : Foreign Contributions regulation Act 2010

What is the news : The problems that non-governmental organisations (NGOs) and registered organisations are facing due to the strict regulations of the Foreign Contribution (Regulation) Act (FCRA), 2010, are magnified when individuals  attempt to channel international funds into the country.

 FCRA 2010

• The FCRA
• Regulates foreign donations and ensures that such contributions do not adversely affect internal security. First enacted in 1976, it was amended in 2010 when a slew of new measures were adopted to regulate foreign donations.
• Is applicable to all associations, groups and NGOs which intend to receive foreign donations. It is mandatory for all such NGOs to register themselves under it. The registration is initially valid for five years and it can be renewed subsequently if they comply with all norms.
• Registered associations can receive foreign contribution for social, educational, religious, economic and cultural purposes. Filing of annual returns, on the lines of Income Tax, is compulsory.
• 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 or impact friendly relations with any foreign state and does not disrupt communal harmony.
• 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?

Members of the legislature and political parties, government officials, judges and media persons are prohibited from receiving any foreign contribution. However, in 2017 the MHA, through the Finance Bill route, amended the 1976-repealed FCRA law paving the way for political parties to receive funds from the Indian subsidiary of a foreign company or a foreign company in which an Indian holds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.

How else can one receive foreign funding?

• The other way to receive foreign contributions is by applying for prior permission. It is granted for receipt of a specific amount from a specific donor for carrying out specific activities or projects. But the association should be registered under statutes such as the Societies Registration Act, 1860, the Indian Trusts Act, 1882, or Section 25 of the Companies Act, 1956.
• A letter of commitment from the foreign donor specifying the amount and purpose is also required. In 2017, the MHA suspended the FCRA of the Public Health Foundation of India (PHFI), one of India’s largest public health advocacy groups, on grounds of using “foreign funds” to lobby with parliamentarians on tobacco control activities. After several representations by the PHFI to the government, it was placed in the ‘prior permission’ category.