The Foreign Contribution (Regulation) Amendment Bill, 2020 was passed by the Lok Sabha on 21 September 2020. The Bill seeks to make it mandatory for office bearers of any non-governmental organisation (NGO) to provide their Aadhaar numbers at the time of registration. Among other provisions, the bill proposes to enable the Centre to allow a NGO or association to surrender its FCRA certificate, reducing the cap on administrative expenses to 20 per cent from the current 50 per cent

  1. It also seeks to mandate the civil society organisations to have SBI accounts at the Delhi branch to receive foreign funds, and prohibits one FCRA-registered society to transfer funds to another which is also recognised by the Act.
  2. The annual inflow of foreign contribution has almost doubled between the years 2010 and 2019, but many recipients of foreign contribution have not utilised the same for the purpose for which they were registered or granted prior permission under the said Act.
  3. This has led to a situation where the Central Government had to cancel certificates of registration of more than 19,000 recipient organisations, including non-Governmental organisations, during the period between 2011 and 2019.
  4. The criminal investigations also had to be initiated against dozens of such non-Governmental organisations which indulged in outright misappropriation or mis-utilisation of foreign contribution.
The origins of the FCRA
  1. The original Foreign Contribution (Regulation) Act was enacted in 1976 by the Indira Gandhi-led government during the Emergency. 
  2. It prohibits electoral candidates, political parties, judges, MPs and even cartoonists from accepting foreign contributions. As the inclusion of ‘cartoonists’ under its ambit suggests, the intent was to clamp down on political dissent.
  3. The ostensible justification given for the law was to curb foreign interference in domestic politics. This was the Cold War era, when both the Soviets and the Americans meddled in the internal affairs of post-colonial nations to secure their strategic interests. 
  4. As the years passed, India seemed to overcome its suspicion of the ‘foreign hand’. It embraced foreign funding by opening up the economy in 1991. 
  5. The Indian state had no problem accepting contributions from foreign donors such as the World Bank or the International Monetary Fund.