Government Plans Tougher FCRA Rules to Boost Transparency, National Security

The government will also regulate the functioning of non-governmental organizations (NGOs) registered under the Foreign Contribution Regulation Act (FCRA). To clarify foreign funding for national security purposes and to take these organizations into account, the government intends to introduce a bill for amendment in the FCRA in this session itself. The bill states that foreign funds must be used for the purpose for which they were received. In case of wrongdoing on the part of the NGOs, the government can also sell its assets.

According to a senior government minister, 16,000 FCRA-registered organizations in the country receive ₹22,000 crore in foreign contributions every year. The current law does not clearly provide for the proper use and management of foreign contributions. In such a situation, foreign contributions can threaten national security. This bill is being introduced to put an end to this.

It provides that the government can take over the assets of an NGO whose FRCA license has been revoked, suspended, or not renewed. A designated authority will be established for this purpose. Through this authority, the government will have the right to take over the organization's assets acquired with foreign donations or deposit the proceeds from the sale of the assets into the Consolidated Fund of India. NGOs will not be permitted to sell the assets without government permission.

Every NGO receiving foreign donations must appoint a designated authority. This authority will ensure that the foreign donations are spent for the intended purpose. The authority will manage and dispose of the assets. If an organization's registration is not renewed for any reason, it will be considered automatically terminated. NGOs will be required to spend the foreign aid only for the intended purpose within a time limit.

The key office bearers of an NGO will include directors, trustees, members of the governing body, and the karta of a Hindu Undivided Family. All of them will be personally responsible for any activity of the NGO. Furthermore, investigating agencies and states will be required to obtain prior permission from the central government before launching a criminal investigation into irregularities in foreign funding against an NGO.

A provision has also been made for reducing the jail term for unauthorized foreign contributions. Currently, the maximum punishment for this is five years and a fine five times the amount of the contribution. This provision is proposed to reduce this to four years.