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Foreign Contribution (Regulation) Act (FCRA)

  • IASbaba
  • October 1, 2021
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Foreign Contribution (Regulation) Act (FCRA)

Part of: Prelims and GS – II – Civil society 

Context The Ministry of Home Affairs (MHA) has extended the deadline till December 31 for NGOs to apply for renewal of their Foreign Contribution (Regulation) Act (FCRA) registration certificates.

  • The registration is mandatory for associations and NGOs to receive foreign funds.

What is Foreign Contribution (Regulation) Act (FCRA)?

  • Foreign funding of persons in India is regulated under FCRA Act and is implemented by the Ministry of Home Affairs.
  • The Act ensures that the recipients of foreign contributions adhere to the stated purpose for which such contribution has been obtained.
  • Under the Act, organisations are required to register/renew themselves every five years.
  • Registered NGOs can receive foreign contributions for five purposes — social, educational, religious, economic and cultural.

Foreign Contribution (Regulation) Amendment Act, 2020

  • Prohibition to accept foreign contribution: The Act bars public servants from receiving foreign contributions.
  • Transfer of foreign contribution: The Act prohibits the transfer of foreign contribution to any other person not registered to accept foreign contributions.
  • Aadhaar for registration: The Act makes Aadhaar number mandatory for all office bearers, directors or key functionaries of a person receiving foreign contribution, as an identification document.
  • FCRA account: Foreign contribution must be received only in an account designated by the bank as FCRA account in such branches of the State Bank of India, New Delhi.
  • Reduction in use of foreign contribution for administrative purposes: Not more than 20% of the total foreign funds received could be defrayed for administrative expenses. In FCRA 2010 the limit was 50%.
  • Surrender of certificate: The Act allows the central government to permit a person to surrender their registration certificate.

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