Published by: HARDIK VERMA

Special Student Columnist


A demonstration of the 42nd Act of 2010 is the 2010 Foreign Contribution Regulation Act by India's Parliament. It is a merging act which aims to direct the recognition and use of foreign commitment or accommodation by specific individuals or affiliations or organizations by specific individuals or affiliations or organizations and to prevent the recognition and use of foreign commitment or friendliness in respect of any practice adverse to the public interest and related matters.[1] It is intended to address flaws in the 1976 Predecessor Act. On 26 September 2010, it obtained Presidential Assent.

During the Emergency, Congress sanctioned the first Foreign Contribution regulation Act in 1976. It bans the toleration of foreign contributions by electoral candidates, political parties, judges, MPs, and even "visual artists." The goal was to clip down on political contradiction, as indicated by the inclusion of "visual artists" under its reach. The key function of the FCRA was to control the inflow of foreign contributions and ensure that the foreign contributions earned were not used for purposes other than those predetermined by the enactment. Under the framework of this Act, all NGOs or charitable organizations in India have received foreign donations.

The Foreign Contribution Regulation Amendment Bill, 2020 was introduced by the Ministry of Home Affairs, Government of India in Parliament to amend the provisions of the Foreign Contribution Regulation Act 2010. The introduction of the bill met with strong resistance from opposition representatives of Parliament and civil society. In any case, irrespective of the opposition, the Bill was passed in both parts of Parliament and will now be submitted to the President for his approval. Once the President gives his approval, the Bill will become law.



· Mandatory requirements for recognition

The Bill introduces another FCRA rule empowering the Government to compel any person applying for FCRA consent or enrollment or renewal to offer Aadhaar cards to all of its office carriers or chiefs or other main functionaries or, in the case of outsiders, a duplicate visa or Indian resident card abroad. The goal behind this move has all the objectives of being two-fold, first for the government to provide a knowledge base of who are the people in charge of foreign contribution from associations and secondly to further advance the pervasiveness and use of the Aadhaar card also.

· Increased overall cap for the suspension time

The Bill amends Section 13 of the FCRA to grant the Government the power to suspend the registration certificate of an individual, meaning that no foreign contribution can be obtained or used for up to 360 days pending a request to cancel the FCRA registration.

· Obligatory opening of the FCRA bank account at the State Bank of India, Delhi

The Bill amends Section 17 of the FCRA, requiring the beneficiary of the foreign payment to receive the amount in the record allocated to the State Bank of India's New Delhi branch as the FCRA account opened. Nevertheless, to keep or use the foreign contribution received from his FCRA Account from the State Bank of India in New Delhi, it also helps the beneficiary to open another FCRA account at any of the booked banks in India. Under current Section 17 of the FCRA, the recipient of the foreign contribution shall be entitled to receive the foreign contribution in an FCRA account opened by any of the proposed banks.

· Power to bar a beneficiary of a foreign donation from receiving its funds

The Bill amends FCRA Section 11 to include a stipulation specifying that the central government, based on any information or report, and following the request for a summary, it is motivated to agree that a person who has been given prior consent has refused any of the provisions of this Act, it can, if any further request is made, guide that such person does not use the unused foreign contribution or obtain the remainder of the foreign contribution of the central government that has not been obtained.

At the end of the day, it allows the Government to limit an individual who has obtained permission under FCRA to receive foreign contribution without government endorsement if the Government agrees that such an individual has rejected the FCRA in the light of a rundown appeal. The government awaiting additional request and before a person is seen to be responsible for such a contradiction will force such a restriction. The current Section 11 of FCRA forces such a limitation just when such an individual is seen as liable for an FCRA violation.

· Reduction of the ceiling on operating expenditures

The Bill amends FCRA Section 8 to lower the international contribution administrative expenditure limit to 20 percent from the existing 50 percent. To cover administrative expenses such as payment of salaries, travel expenses, consumables such as water, electricity, telephone charges, postal charges, leasing and maintenance of premises, running costs, etc., foreign contribution recipients could until now, use 50 percent of the foreign contribution.

· Prohibition on the allocation of foreign assistance

The Bill replaces Section 7 of the FCRA by prohibiting the transfer to any entity of such foreign contributions by persons authorized to receive foreign contributions under the FCRA.

Current Section 7 of the FCRA provides for the transfer of foreign contributions to those registered under the FCRA or previously allowed under the FCRA to accept foreign contributions. Also, in the ambit of the current rules of existing FCRA[3] With the prior approval of the Government, the recipient of the foreign contribution may pass part of that foreign contribution to any other individual who does not have an FCRA registration or authorization.

· Prohibition against public servants from receiving foreign contributions

Section 3 of FCRA is amended by the Bill to expand the rundown of persons who are excluded from receiving foreign contributions. It includes public servants as defined in this overview in Section 21 of the Indian Penal Code, 1860. Section 3 of the FCRA previously limited the reception of foreign contributions from appointed bodies, government employees, and members of government asserted or managed partnerships or bodies. Besides, the extension of the public worker in the rundown would deny, among other things, the obtaining of foreign contribution by the individuals in the administration or pay of the Government or paid by fees or commissions for the display by the Government of any open duty.

· Relaxed requirements for farmers, teachers, religious groups, and other groups not interested in 'national politics.'

The Ministry of Home Affairs (MHA) has loosened requirements for farmers, students, religious and various meetings who, if the meetings are not engaged in dynamic politics, are not specifically adapted to any ideological political party category to receive foreign funds. On Wednesday, the Ministry announced new regulations under the International Contribution Regulation Act (FCRA), 2010 and amended the FCRA Rules, 2011. The new rule said that " Organizations defined in sub-rule (1) under clauses (v) and (vi),[4] If they engage in active politics or party politics, as the case may be, they are deemed to be of a political nature."


On Sept. 21, the Lok Sabha passed the Foreign Contribution (Regulation) Amendment (FCRA) Bill, 2020, amid fears by non-governmental organizations that the proposed amendments would further address overseas funding networks. Throughout a conversation in the Lower House, Home State Minister Nityanand Rai argued that the law should have been further revised to forestall the misuse of foreign assets[5] by those who are getting it. Somewhere in the years 2010 and 2019, the annual inflow of foreign contributions has almost doubled. As suggested by the government, it was not used by various recipients of foreign funding for the purposes for which they were enlisted. Adversaries have argued that the administration has used the agreements as charitable and voluntary trusts to clash with political adversaries.

On 8 July, the Home ministry set up an Inter-Ministerial Board of Trustees to oversee the audits of three trusts linked to the Gandhi family for suspected violations between different rules, FCRA 2010. The Rajiv Gandhi Foundation, the Indira Gandhi Memorial Trust, and the Rajiv Gandhi Charitable Trust are such trusts. The confidence denied any bad behavior. The Central Bureau of Investigation (CBI) targeted the workplaces of the Amnesty International Human Rights Organization in November 2019 for a suspected violation of the FCRA. The allegations were dismissed by the group. As indicated by home ministry information, the Center has dropped enlistment endorsements of over 19,000 NGO’s and charitable trusts somewhere in the range of 2011 and 2019.[6]

FCRA, 2010, as stated in the Declaration of Objects and Reasons of the new Bill, was ordered to monitor the identification and use of foreign contribution or international cordiality for any exercises hindering "public enthusiasm". Under FRCA, it is forbidden to accept unfamiliar gifts from election candidates, supervisors or publishers, judges, individuals from any governing body, and ideological classes. In this rundown of disallowed persons, the Bill includes public servants as characterized under the Indian Penal Code. The main correction proposes to present the need for Aadhaar, the biometric ID, stating that Aadhaar's subtleties of all its office-conveyors should now be provided by candidates as an ID record. The Bill prohibits an aspect of an accomplice association or a related person, which is a common practice, from exchanging international awards.

Under FCRA, a registered person must accept foreign donations only in one branch of a scheduled bank but may open more accounts in other banks to invest the funds. The Bill states that, as informed by the central government, the foreign contribution can now only be received in an account designated by the bank as the 'FCRA account' in a branch of the State Bank of India, New Delhi. No funds other than a foreign donation should be collected or deposited in this account. International grant applicants have previously been allowed to use 50 percent of the contribution to cover operating expenses. The Bill lowers this limit to 20 percent. The Voluntary Action Network India, a representative body of development organizations, has advised the government to refer the Bill to a selected or permanent parliamentary committee. “The Bill throttles the collaborative spirit initiated earlier this year by the proactive role played by development organizations in mitigating the lockdown and the pandemic of Covid-19 by making it almost impossible for NGOs to function.”[7]


The Amendment Act aims to ensure greater transparency and accurate observation of the inflow of foreign assets and the use of the exercises set out in their enlistment. Further clarification is required by some sections of the Amendment Act. Although the Amendment Act was advised on 29 September 2020, NGOs should hang on to the alteration rules under the Act to determine, inter alia, the allocation of part of the State Bank of India and the methods for opening an extraordinary record before fully understanding and consenting to the new administrative wishes. Meanwhile, NGOs will continue to function as regularly and operate their assigned records in any event.

It is a never-ending debate, however, that if such radical reforms were appropriate since international contributions were already under strict regulatory controls, such changes would certainly have far-reaching implications for education, health, citizens' livelihoods, gender justice, and indeed democracy in India.

Footnotes: [1] https://fcraonline.nic.in/home/PDF_Doc/FC-RegulationAct-2010-C.pdf [2] https://www.mondaq.com/india/constitutional-administrative-law/988998/foreign-contribution-regulation-amendment-bill-2020-a-few-hits-and-many-misses#:~:text=The%20Bill%20amends%20Section%2013,for%20cancellation%20of%20FCRA%20registration. [3] Rule 24 of the Foreign Contribution (Regulation) Rules, 2011 [4] Foreign Contribution Regulation Act (FCRA), 2010 [5] https://www.hindustantimes.com/india-news/what-the-fcra-amendments-mean/story-3kVry4Tx2ml0ObG19dFNvL.html [6] https://economictimes.indiatimes.com/news/economy/policy/parliament-passes-bill-to-amend-foreign-contribution-regulation-act/articleshow/78269576.cms?from=mdr [7] https://economictimes.indiatimes.com/news/economy/policy/parliament-passes-bill-to-amend-foreign-contribution-regulation-act/articleshow/78269576.cms?from=mdr