Amendments to Foreign Contribution (Regulation) Act (FCRA), 2010

Source: The Hindu

Context:

The Union Government is set to introduce amendments to the Foreign Contribution (Regulation) Act (FCRA), 2010 during the ongoing Parliament session. The proposed changes aim to strengthen regulation, transparency, and accountability of foreign-funded NGOs in India.

What is FCRA?

The Foreign Contribution (Regulation) Act, 2010 regulates:

• Acceptance of foreign contributions by individuals and organisations
• Utilisation of foreign funds by NGOs

Objective:

Ensure that foreign funding is not used for activities detrimental to national interest.

Key Proposed Amendments

1. Appointment of “Designated Authority”

• A new Designated Authority will be empowered to:
  • Take over management of NGOs
  • Manage operations
  • Dispose of assets

Applicable When:

• NGO registration is:
  • Suspended
  • Cancelled
  • Not renewed

2. Expansion of “Key Functionary” Definition

The term “key functionary” will now include:

• Directors
• Partners
• Trustees
• Karta of Hindu Undivided Family (HUF)
• Members of governing bodies or committees
• Any person controlling NGO operations

Impact:

• Broadens accountability to include all decision-makers

3. Liability of Key Functionaries

• Key individuals will be held legally accountable for violations

Implication:

• Enhances personal responsibility
• Improves compliance and governance standards

4. Prior Approval for Investigation

• Law enforcement agencies and State governments must:
  • Obtain Central Government approval before initiating investigations

Concerns:

• May affect:
  • Federal balance
  • Autonomy of investigative agencies

5. Fixed Timelines for Fund Utilisation

• Introduction of time-bound utilisation of foreign funds

Earlier:

• No strict deadlines

Benefit:

• Prevents fund hoarding
• Ensures efficient and timely usage

6. Reduction in Punishment

• Maximum imprisonment reduced:
  • From 5 years to 1 year

Objective:

• Rationalise penalties
• Reduce severity of punishment

Current Scenario of FCRA in India

• Around 16,000 NGOs registered under FCRA
• Annual foreign funding approximately ₹22,000 crore