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Tuesday, September 27, 2022

BIG NEWS : Modi Govt to amend FCRA act – Game Over for Foreign Funded Public Servants and NGO’s !!

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In an important development, the Modi Government has proposed amendments to FCRA, which will bar the Public servants from receiving any foreign funds. It also limits the NGOs or associations registered under the Foreign Contribution (Regulation) Act, 2010, to use not more than 20% of their foreign contributions towards meeting their administrative expenses.

The FCRA (Amendment)Bill, 2020, will be introduced in the Lok Sabha on Sunday. The definition of the public servant would be based on Section 21 of the Indian Penal Code.
Currently, the NGOs/associations holding FCRA license can use up to 50% of their foreign contributions towards meeting administrative expenses like salaries, rental, stationery, and travel expenses. This limit is proposed to be reduced to 20%.

The government was thinking of streamlining the provisions of FCRA by putting more focus on compliance mechanisms and enhancing accountability and transparency as far as receiving and utilization of the funds is concerned. Every year, our NGOs receive foreign funds worth several thousands of crores of rupees every year.

As per the amendments proposed in FCRA Amendment Bill, Section 7 is to be revised to prohibit any transfer of foreign contribution to any association or person.
Also, any person who makes an application for prior permission or seeks registration under FCRA or renewal of his FCRAlicence will now have to mandatorily furnish the Aadhaar number of all its office bearers or directors or other key functionaries, or, in case of a foreigner, a copy of the passport or overseas citizen of India card, as reported by Times of India.

The Bill will also enable the Government to let an NGO/Association to surrender its FCRA certificate. Such surrender will be allowed only if the Government is satisfied that the said NGO or Person has not violated any provision of the acts

In another important amendment, all NGOs and Associations registered under FCRA would be required to receive foreign contributions exclusively in a designated FCRA account, that should be opened in the State Bank of India at New Delhi or as the Centre shall specify by further notification. However, the entities may be allowed to open one or more accounts in other banks for keeping or utilizing the foreign contribution received from their primary FCRA account in SBI, New Delhi.

The State Bank of India, New Delhi branch, or any other bank, where such designated FCRA account is opened for NGOs and Individuals, have to share all the details of foreign remittance, source of funding, and other information to the Home Ministry. This will seal the loophole in the system, where it was difficult for the Government to keep a track of the fund inflows and outflows.

The government has reviewed the annual inflow of NGOs’s and it was observed that foreign contribution has almost doubled between 2010 and 2019 but many NGOs/associations/Individuals have not utilized the funds for the declared purpose, as per the statement of objects and reasons for the Bill. Many were found wanting in ensuring basic statutory compliances such as submission of annual returns.

Sensing the loopholes and misuse of the FCRA act, the Home Ministry started a massive crackdown on such NGOs and had to cancel the FCRA certificates of over 19,000 organizations between 2011 and 2019. The criminal investigation also had to be ordered against dozens of NGOs which indulged in outright misappropriation or non-utilization of foreign contribution.

This amendment is going to hurt the Public Servants and NGO’s which are taking foreign funds and misusing them against India. We have seen many instances where many NGOs have been involved in creating unrest in the country, they all receive their fundings from abroad. Past these amendments, such NGOs won’t be able to act in that manner. It was also observed the Public servants open the organizations in their spouse or Children’s name and they take funds from foreign entities and misuse them, but now that will be stopped completely.

Be ready for another round of Intolerance drama across the India !!

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