HM Amit Shah introduces FCRA Bill: States ‘No more foreign fundings’ for public servants / NGOs

The Tatva Staff September 20, 2020

The Foreign Contribution (Regulation) Act (FCRA) is all set to be amended, under which providing the Aadhar numbers of the office-bearers of any NGO will be mandatory for registration and public servants will be barred from receiving any funds from abroad.

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”.

Under the proposed law, NGOs can receive foreign funds only in designated FCRA accounts in a State Bank of India branch in New Delhi. However, they may open one or more utilisation accounts in any banks of their choice. The bank’s branch would then report to the home ministry the prescribed amount of foreign remittance, the sources and manner in which it was received and other particulars.

The amendment bill also seeks to prohibit ‘public servants’ from receiving any foreign funding, and also proposes to reduce the use of foreign funds to meet administrative costs by NGOs from the existing 50 per cent to 20 per cent.

Raising objection to the clause, Congress’ Chowdhury said: “This will crush dissent and confine unnecessary power in the hands of the government.”

The foreign fundings have been a major cause of riots, communal disharmony, conversions, illegal/criminal acts withing the country and via this move, the government seeks to put an end to it and the minimal amount of exchange of funds that’ll take place, will be traced.

The act came into force on 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.

Over Rs 58,000 crore foreign funds were received by NGOs registered under the FCRA between 2016-17 and 2018-19. There are around 22,400 NGOs in the country.