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Foreign Contribution (Regulation) Amendment Bill 2020

Topics Covered: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Foreign Contribution (Regulation) Amendment Bill, 2020:


Introduced in the Lok Sabha.

It seeks to make significant changes to the Foreign Contribution (Regulation) Act (FCRA).

Proposed amendments- the Bill

  • It seeks to prohibit ‘public servants’ from receiving any foreign funding.
  • It proposes to reduce the use of foreign funds to meet administrative costs by NGOs from the existing 50 per cent to 20 per cent.
  • It seeks to “prohibit any transfer of foreign contribution to any association/person”.
  • It proposes to make Aadhaar cards a mandatory identification document for all office-bearers, directors and other key functionaries of NGOs or associations eligible to receive foreign donations.

Controversial Provisions:

  • To allow for the central government to hold a summary inquiry to direct bodies with FCRA approval to “not utilise the unutilised foreign contribution or receive the remaining portion of foreign contribution”.
  • To limit the use of foreign funds for administrative purposes. This would impact research and advocacy organisations which use the funding to meet their administrative costs.

Main Criticisms:

The Bill will enhance government power and restrict foreign-funded civil society work in India.

It can be used as a means to “target those who speak against the government”.

It will curtail the ease of doing business for civil society organisations.

But, why these amendments are necessary?

  • The need to strengthen the Act has arisen due to several organisations “misutilising or misappropriating” the funds leading to the government cancelling 19,000 such registrations in the past few years.
  • The annual inflow of foreign contribution has almost doubled between the years 2010 and 2019, but many recipients of foreign contribution have not utilised the same for the purpose for which they were registered or granted prior permission under the said Act.
  • Criminal investigations also had to be initiated against dozens of such non-governmental organisations which indulged in outright misappropriation or mis-utilisation of foreign contribution.


Prelims Link:

  1. When was FCRA enacted?
  2. Who administers the legislation?
  3. Definition of foreign funding as per the act.
  4. Who cannot accept foreign contributions as per the act.
  5. What is the eligibility criteria for grant of registration?
  6. Key provisions in the amendment bill.

Mains Link:

Discuss why FCRA has been controversial in the recent past.

Sources: PIB.