Foreign Contribution Regulation Act (FCRA)

Foreign Contribution Regulation Act 
(FCRA) 

FCRA, 2010 seeks to regulate the foreign
contributions or donations to organizations and individuals in India and to curb those contributions which might be detrimental to the national interest.

Foreign Contribution includes currency, articles other than gifts for personal use and securities received from foreign source.

It was brought in 1976 to check that foreigners are not affecting India’s electoral politics, public servants, judges, journalists, NGOs etc. for wrong purposes.

The FCRA, 2010, the FCRA Rules, 2011, and FCRA Amendment Rules, 2015 were respectively enacted to regulate the inflow of foreign funds received by NGOs.

  •The FCRA, 2010 replaces the erstwhile Foreign Contribution (Regulation) Act of 1976.

It enables an association or an NGO to receive foreign funds, and they have to mandatorily
register under it to receive such funds.

The term ‘foreign source’ also has an extensive ambit and includes:

! Foreign citizens
! Foreign companies, corporations and MNCs
! Foreign government and their agencies
! International agencies other than specifi ed and government notifi ed agencies
! Foreign trusts, foundations, trade unions,
societies, clubs or any other associations of
individuals formed outside India

According to terms stipulated in the FCRA, an
organisation cannot receive foreign funding unless it is registered under the 2010 Act, except when it gets government approval for a specifi c project.

One of the main requirements under the FCRA is that organisations have to submit their annual return to the government within nine months from the closure of the previous fi nancial year.

It narrowed the scope and purpose for foreign financing and increased the frequency of reporting it to every three months. But to foster a culture of compliance; the NGO sector was one of the first to feel the brunt of anti-corruption campaign.

#Controversies_around_FCRA

Despite being a law related to fi nancial regulation, FCRA does not fall within the purview of the RBI but under the Home Ministry as it is internal security legislation.

FCRA registration under the earlier law was
permanent, but under the new one, it expired after five years, and had to be renewed afresh.

The new law put a restriction (50 per cent) on the proportion of foreign funds that could be used for administrative expenses.

The 1976 law was primarily aimed at political parties, the new law set the stage for shifting the focus to “organisations of a political nature”.

 The FCRA Rules, 2010, framed by the United Progressive Alliance government, has served the NDA well as a manual on how to target inconvenient NGOs, especially those working on governance
accountability.

•United Nation’ views on FCRA, 2010

FCRA provisions “are not in conformity with
international law, principles and standards”.
The right to freedom of association is incorporated under the International Covenant on Civil and Political Rights, to which India is a party.
Access to resources, particularly foreign funding, is part of the right to freedom of association.
Restrictions in the name of “public interest” and “economic interest” as invoked under the FCRA rules fail the test of “legitimate restrictions”.

The terms are too vague and give the state excessive discretionary powers to apply the provision in an arbitrary manner.

Besides, given that the right to freedom of
association is part of the Universal Declaration of Human Rights (article 20), a violation of this right also constitutes a human rights violation.

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