NEWS

The Supreme Court upheld amendments introducing restrictions in the Foreign Contribution (Regulation) Act (FCRA) while holding that no one has a fundamental or absolute right to receive foreign contributions

ABOUT FCRA

• Foreign funding of persons in India is regulated under FCRA Act and is implemented by the Ministry of Home Affairs.
• The Act ensures that the recipients of foreign contributions adhere to the stated purpose for which such contribution has been obtained.
• Under the Act, organizations are required to register/renew 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.
• 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: Foreign contribution 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: 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.