Foreign Contribution (Regulation) Act (FCRA)

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Foreign Contribution (Regulation) Act- Relevance for UPSC Exam

GS Paper 2: Development processes and the development industry– the role of NGOs, SHGs, various groups and associations, donors, charities, institutional and other stakeholders.

Recently, the Ministry of Home Affairs (MHA) has extended the deadline for NGOs to apply for renewal of their Foreign Contribution (Regulation) Act (FCRA) registration certificates.
The certificates of around 80% of NGOs are expected to expire on October 31 and as per norms, they have to apply at least six months before the expiry of registration.

Mandatory Provisions: The FCRA registration is mandatory for associations and NGOs to receive foreign funds. These mandatory provisions were introduced in 2020 through an amendment to the FCR Act 2010.
- The NGOs have to compulsorily open an account with the SBI in Delhi to receive foreign contributions.
- The FCRA registration is renewed every five years.
- There are 22,762 FCRA registered NGOs in India.
Benefits: Registered NGOs can receive the foreign contribution for five purposes- social, educational, religious, economic and cultural.

Public Servants: bars public servants from receiving foreign contributions.
Mandatory registration using Aadhar: Aadhaar number is to be used mandatorily as an identification document for all office bearers, directors, or key functionaries of a person receiving foreign contributions.
Transferability of foreign contribution: It bars the transfer of foreign contribution to any other person not registered to accept foreign contributions.
Use of foreign contribution: The Act provides that only up to 20% of the total foreign funds received could be used for administrative expenses.
- This limit was 50% in FCRA 2010.
FCRA bank account: Recipients of the foreign contributions are to mandatorily open a dedicated FCRA bank account with the SBI in Delhi to receive foreign contributions.