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Foreign Contribution (Regulation) Act, 2010:

GS Paper 2:

Topics Covered: Role of NGOs.



Representatives of NGOs, middlemen and public servants of Foreign Contribution Regulation Act (FCRA) division of MHA were recently arrested by the CBI for committing violations of FCRA provisions and facilitating illegal clearances in lieu of bribes”.


What’s the issue?

FCRA clearances have been a fraught issue for several years, and the government has often been accused of targetting NGOs for political or ideological reasons by cancelling or not renewing their clearances.

  • The registrations of about 5,900 NGOs had ceased to be active after December 31, 2021, owing to either the NGOs not applying for renewal before the due date, or the MHA refusing their renewal for alleged violation of the FCRA.


How FCRA regulates NGO funding?

FCRA regulates foreign donations and ensures that such contributions do not adversely affect the internal security of the country.

The Act, first enacted in 1976 was amended in the year 2010 and then 2020.

Section 5 of the Foreign Contribution (Regulation) Act, 2010 gives the Union government “unchecked and unbridled powers” to declare an organisation as being one of political nature and deny it access to funds from sources abroad.

  • FCRA is implemented by the Ministry of Home Affairs.



  • The provisions of the Act apply to the territory of India, to citizens of India who may be outside India and to companies or their branches outside India that are registered or incorporated in India.
  • The entities covered by the Act include an individual, a Hindu undivided family, an association, or a registered company.


For how long is approval granted?

Once granted, FCRA registration is valid for five years. NGOs are expected to apply for renewal within six months of the date of expiry of registration. In case of failure to apply for renewal, the registration is deemed to have expired, and the NGO is no longer entitled to receive foreign funds or utilise its existing funds without permission from the ministry.


Prior Reference Category under the Act:

It implies that to donate to such an NGO, a foreign donor has to take prior clearance from the Ministry of Home Affairs.


Latest 2020 amendments and criticisms associated:

  • The amendments mandated that registered NGOs open a designated account in the main branch of the State Bank of India in the Capital in which the foreign contributions to their various causes would exclusively land.
  • The petitioners have argued that this measure would be cumbersome for NGOs operating in rural India and far away from the Capital.



Prelims Link:

  1. About FCRA.
  2. About Foreign Funding of NGOs.
  3. Applicability of FCRA.
  4. Who Cannot Receive Foreign Contribution?
  5. FCRA Amendments.
  6. What Is A Foreign Contribution Under FCRA?
  7. Prior Reference Category.

Mains Link:

Discuss the major provisions of the Foreign Contribution (Regulation) Act (FCRA) and the need for such legislation.


Q.3) Consider the following statements:

  1. FCRA is implemented by the Ministry of Home Affairs.
  2. Prior Reference Category is mentioned under FCRA.

Which of the above statements is/are correct?

  1. 1 only.
  2. 2 only.
  3. Both.
  4. None of the above. 

Sources: Indian Express.