Govt tightens FCRA rules to stop unregulated foreign cash & safeguard national security
UPSC / SSC current affairs note · Polity
Why in news
The Union government has tightened Foreign Contribution (Regulation) Act (FCRA) rules to curb unregulated foreign funding and safeguard national security. This move aims to ensure transparent and accountable foreign contributions for developmental work.
Background
The FCRA was enacted in 2010 to regulate foreign donations to individuals and associations in India. Over the years, concerns about misuse of foreign funds for activities detrimental to national interest have led to stricter amendments, including the 2020 amendment that restricted the use of foreign contributions and mandated Aadhaar-based registration.
Key facts
FCRA stands for Foreign Contribution (Regulation) Act, 2010.
The Act regulates the acceptance and utilization of foreign contributions by individuals, associations, and companies in India.
Recent amendments require NGOs to have Aadhaar numbers for all office bearers and to open a designated FCRA account in a specified bank (SBI, New Delhi).
Foreign contributions cannot be transferred to other entities or used for administrative expenses beyond 20% of the total funds.
The government can suspend registration of NGOs for up to 180 days pending inquiry.
FCRA registration is mandatory for receiving foreign funds, and renewal is required every five years.
The 2020 amendment prohibited the use of foreign contributions for 'political or electoral purposes' and 'social or cultural activities' without prior approval.
The government has cancelled FCRA licenses of over 6,000 NGOs in recent years for non-compliance.
Prelims pointers
- FCRA: Foreign Contribution (Regulation) Act, 2010
- Ministry of Home Affairs (MHA) is the nodal ministry for FCRA
- FCRA registration valid for 5 years
- Designated bank: State Bank of India, New Delhi
- Aadhaar mandatory for office bearers
- Administrative expenses cap: 20%
- Suspension period: up to 180 days
- 2020 amendment: prohibited use for political purposes
Mains angles
- GS2: Role of NGOs in development and concerns over foreign funding
- GS2: Government policies and interventions for transparency and accountability
- GS3: Internal security threats from unregulated foreign funds
- GS2: Issues related to federalism and state vs centre on NGO regulation