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FCRA amendments crippling our work, say NGOs

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

FCRA amendments crippling our work, say NGOs:


Context:

An NGO has now moved the Delhi High Court seeking exemption from the Union Home Ministry’s March 31 deadline to open an FCRA account with the SBI branch in New Delhi.

What’s the issue?

The amendments to the Foreign Contribution Regulation Act (FCRA) enacted in 2020 made it compulsory for NGOs to open a bank account in Delhi.

  • But, this has crippled the work of many organisations that are unable to receive foreign funds.
  • Many NGOs are affected by the new regulations as they are hampering charitable work during the pandemic.

Foreign Contribution (Regulation) Amendment, 2020:

  • 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.
  • It seeks 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”.
  • And 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.

InstaLinks:

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: the Hindu.