What is the FCRA law for 2024

The Foreign Contribution (Regulation) Act (FCRA) is a judicial framework in India that governs the taking and use of foreign contributions by folks, associations, and organizations. Enacted in 1976, the FCRA aims to certify that foreign funds do not adversely affect the rule, integrity, and security of the nation. Over the years, the Act has undergone several revisions to boost transparency and accountability in the management of foreign contributions. As of 2024, the FCRA continues to play a pivotal role in regulating foreign funding to various entities within India.
Key Provisions of the FCRA:
1. Registration Requirement: Any organization or specific anticipating receiving foreign contributions must obtain prior action or permission from the Ministry of Home Affairs (MHA). This warrants that only things with a clear track record and legitimate objectives can entrée foreign funds.
2. Designated Bank Account: Recipients of foreign gifts are required to open a voted bank account at a specified branch of the State Bank of India in New Delhi. This measure unifies the inflow of foreign funds, facilitating better monitoring and regulation.
3. Utilization of Funds: Foreign contributions must be used strictly for the purposes for which they were received. The Act bars the use of such funds for activities harmful to the national interest, plus those affecting the rule and integrity of India.
4. Administrative Expenses Cap: The FCRA limits the percentage of foreign funds that can be used for clerical expenses. As per the 2020 amendment, this cap was reduced from 50% to 20%, certifying that a significant portion of foreign contributions is directed towards the intended social, folk, or educational activities.
5. Prohibition on Transfer of Funds: The Act bars the transfer of foreign contributions to other folks or organizations unless exactly permitted by the MHA. This provision aims to prevent the indirect routing of funds to unregistered entities.
6. Mandatory ID: Key functionaries of recipient organizations are required to provide ID documents, such as Aadhaar numbers, to establish their self. This measure enriches transparency and accountability.
Recent Amendments and Updates:
In recent years, the FCRA has undergone several amendments to strengthen its regulatory framework:
• FCRA Amendment Act, 2020: This amendment introduced significant changes, including the reduction of the administrative expenses cap, mandatory opening of a designated bank account at the State Bank of India in New Delhi, prohibition on the transfer of alien funds to other entities, and the requirement for key functionaries to provide Aadhaar details.
Hindustan Times
• FCRA Amendment Rules, 2022: The government better the number of compoundable offenses under the Act from 7 to 12. Other key changes included exemption from intimation to the government for contributions less than ₹10 lakh (previously ₹1 lakh) and an rise in the time limit for the intimation of the opening of bank accounts.
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• FCRA Amendment Rules, 2023: The Ministry of Home Affairs amended the rules, mandating that NGOs registered under the FCRA must disclose details of movable and set monies created using foreign funds. This move aims to enrich transparency and certify that foreign contributions are used for their intended purposes.
Times of India
Compliance and Enforcement:
The FCRA mandates strict compliance, and ruins can lead to severe consequences, including suspension or cancellation of registration. The Ministry of Home Matters has been vigilant in enforcing the provisions of the Act, with several NGOs facing action for non-compliance. For instance, the FCRA license of the Centre for Policy Research (CPR) was cancelled due to alleged violations.
Challenges and Criticisms:
While the FCRA aims to regulate foreign contributions to safeguard national interests, it has faced criticism for being overly stringent. Critics argue that the Act's provisions can impede the functioning of NGOs, especially those involved in advocacy and human rights work. The requirement to open a designated bank account in New Delhi and the cap on administrative expenses are seen as burdensome by some organizations.
Finish:
The Foreign Contribution (Regulation) Act remains a key tool for regulating foreign contributions in India. The recent amendments reflect the government's intent to develop transparency and accountability in the utilization of foreign funds. However, it is essential to balance regulatory oversight with the operational needs of NGOs to confirm that they can continue their vibrant work without undue hindrance. Organizations receiving foreign contributions must stay abreast of the latest provisions and confirm strict compliance to maintain their registration and continue their activities effectively.