The government has introduced the bill seeking to amend the FDCRA in the Lok Sabha.(File photo/PTI)
The government has introduced the bill seeking to amend the FDCRA in the Lok Sabha.(File photo/PTI)

Govt proposes to amend FCRA, make Aadhar mandatory for NGOs to receive foreign funds

The bill to amend the FCRA has been introduced in the Lok Sabha. It seeks to limit the use of foreign funds for administrative purposes from the current limit of 50 per cent to 20 per cent.
By hindustantimes.com | Edited by: Amit Chaturvedi | Hindustan Times, New Delhi
UPDATED ON SEP 20, 2020 02:49 PM IST

The Centre on Sunday proposed amendments in the Foreign Contribution Regulations Act or FCRA through a bill it introduced in the Lok Sabha or lower house of Parliament.

According to the government, the proposed amendments “seek to streamline the provisions of the FCRA by strengthening the compliance mechanism, enhancing transparency and accountability in the receipt and utilisation of foreign contribution worth thousands of crores of rupees every year”.

The proposed amendments seek to bar public servants from receiving foreign funding.

The amendments seek to make Aadhar mandatory for all office bearers of NGOs and other organisations which are seeking foreign contributions.

The bill also seeks to limit the use of foreign funds received under FCRA for administrative purposes from the current limit of 50 per cent to 20 per cent.

“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. Many of them were also found wanting in ensuring basic statutory compliances such as submission of annual returns and maintenance of proper accounts,” according to the proposed amendment.

“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,” it further says.

The bill, if passed, will empower the government to ask a violator to not use the funds by holding a “summary inquiry”.

After the amendments are passed, no organisation will be able to transfer foreign contribution to any association/person under Section 7 of the FCRA.

“Every person who has been granted certificate or prior permission for foreign funding shall receive foreign contribution only in an account designated as “FCRA Account” which shall be opened by him in such branch of the State Bank of India at New Delhi, as the Central Government may, by notification, specify and for other consequential matters relating thereto,” the proposed amendment says.

The FCRA was enacted to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected therewith or incidental thereto.

The act came into force on the May 1, 2011, and has been amended twice since then. The first amendment was made by Section 236 of the Finance Act, 2016 and the second amendment was made by Section 220 of the Finance Act, 2018.

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