• Any NGO involved in anti-developmental activities, religious conversion, inciting protests with malicious intentions or that has links to terrorist or radical organisations will face the cancellation of its FCRA registration, the Ministry of Home Affairs (MHA) has announced.  

• In a notice uploaded on an official website, the MHA also said that any NGO whose acceptance of foreign funding may affect social or religious harmony or is involved in induced or forceful religious conversion or proselytisation will face cancellation of its registration under the Foreign Contribution (Regulation) Act, 2010.

• FCRA registration will also be cancelled if any NGO is not utilising foreign funding as per the aims and objectives of the NGO or if it has not uploaded the annual returns.

• According to the law, all NGOs receiving foreign contributions have to be registered under the Foreign Contribution (Regulation) Act or else are not allowed to accept foreign funding.

Foreign Contribution (Regulation) Act

• The Foreign Contribution (Regulation) Act, 2010, came into effect in 2011. 

• It has been enacted by Parliament to consolidate the law 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 national interest and for matters connected therewith or incidental thereto.

• While the provisions of the repealed FCRA, 1976, have generally been retained, the FCRA, 2010, is an improvement over the repealed Act as more stringent provisions have been made in order to prevent misutilisation of the foreign contribution received by the associations.

• In September 2020, the Parliament passed the Foreign Contribution (Regulation) Amendment Bill, 2020. It received the Presidential assent on September 28, 2020.

Key provisions of the FCRA:

1) A person who is registered under this Act cannot transfer foreign contribution to any other person. The term ‘person’ under the Act includes an individual, an association, or a registered company.

2) The following are prohibited to receive foreign contribution:

• Candidate for election, MPs, MLAs.

• Correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper.

• Public servant, judge or employee of any corporation or any other body controlled or owned by the government. Public servant means any person who is in service or pay of the government, or remunerated by the government for the performance of any public duty.

• Political party or office bearer thereof.

3) Providing the Aadhaar number of the office-bearers of an NGO is mandatory for the registration of the organisation under the FCRA. In case of a foreigner, a copy of the passport or Overseas Citizen of India Card is a must. 

4) Every person who has been granted certificate or prior permission shall receive foreign contribution only in an account designated as ‘FCRA Account’ by the bank, which shall be opened by the person in the State Bank of India in New Delhi. No funds other than foreign contribution shall be received or deposited in any such account.

However, the person can open another ‘FCRA Account’ in any of the scheduled banks for the purpose of keeping or utilising the foreign contribution which has been received from SBI branch in New Delhi.

5) Maximum limit for utilising foreign contribution for administrative (office) expenses have been brought down to 20 per cent. Earlier, it was 50 per cent.

6) On the basis of any information or report and after holding a summary inquiry, if a person is found to have contravened any of the provisions of this Act, the central government can direct that such person shall not utilise the remaining foreign contribution without prior approval.

7) The central government may permit any person to surrender the registration certificate, if it is confirmed that such person has not contravene any of the provisions of the Act, and the management of foreign contribution and asset has been vested in the authority.

8) Earlier, the government could suspend the registration for only 180 days during which no foreign funding could be received. Following the amendment, it has been extended to up to 180 additional days.

9) Before renewing the certificate, the government may make an inquiry to satisfy itself that the person has fulfilled following conditions:

• The person is not fictitious or benami.

• Has not been prosecuted or convicted for indulging in activities aimed at conversion through inducement or force, either directly or indirectly, from one religious faith to another.

• Has not been prosecuted or convicted for creating communal tension or disharmony in any specified district or any other part of the country.

• Has not been found guilty of diversion or mis-utilisation of its funds.

• The person is not engaged or likely to engage in propagation of sedition or advocate violent methods to achieve its ends.

• The person is not likely to use the foreign contribution for personal gains or divert it for undesirable purposes.

• Has not contravene any of the provisions of the Act.

• Has not been prohibited from accepting foreign contribution.

Other main reasons behind FCRA cancellations:

• Giving a long list of reasons under which an NGO's FCRA registration is cancelled, the MHA said an NGO’s FCRA registration can be cancelled if no activity has been carried out by it or it has become defunct or the claimed activities could not be corroborated during field inquiry or field inquiry has revealed that no reasonable activity for the welfare of society has been undertaken by the NGO during last two-three years.

• Other reasons for cancellation include prosecution pending against any office bearer, member, or key functionaries for not responding to clarifications sought, or for not providing requisite information or documents despite being given the opportunity to do so.

• If an NGO has diverted foreign contribution for carrying out anti-development activities or inciting malicious protests, field inquiry has revealed the likelihood of personal gain by the organisation or by the office bearers, or the foreign contribution is likely to have been utilised for undesirable activities, linkage with terrorist organisations or anti-national organisations, key functionaries have links with terrorist or radical organisations, their FCRA registration would be cancelled.

• If any field agency has reported adverse inputs against the NGO and its acceptance of foreign funding is likely to affect social, religious harmony or is involved in induced, forceful religious conversion or proselytisation or its office bearers have linkage with radical organisations — the organisation will also face action under the FCRA.

• The notice said not utilising any foreign funding for projects as per the aims and objectives of the NGO, not uploading annual returns of any of the previous six financial years, and not fulfilling the criteria of spending a minimum amount of Rs 15 lakh of its core activities for the welfare of society during the last three financial years were also included as reasons for cancellation of FCRA registration.

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