Context
The Union Government is likely to introduce the Foreign Contribution (Regulation) Amendment Bill, 2026, during the ongoing session of Parliament to streamline the management of foreign funds and assets created by NGOs.
1. Key Proposed Legislative Changes
- Designated Authority: A new provision allows for the appointment of a “designated authority” to take over, manage, or dispose of assets created out of foreign funds by an NGO whose registration has been suspended, cancelled, or not renewed.
- Expansion of “Key Functionary”: The definition of a “key functionary” of an NGO is being expanded beyond directors and office bearers to include partners, trustees, and the Karta of a Hindu Undivided Family.
- Reduction in Penalties: The Bill proposes to reduce the maximum imprisonment for FCRA-related offences from five years to one year.
- Liability: Key functionaries will now be held directly liable for offences committed under the Act.
- Investigation Approval: Law enforcement agencies or State governments must seek prior approval from the Central Government before initiating investigations into FCRA-related complaints (Amendment to Section 43).
- Fund Utilization Timelines: The Bill proposes fixed timelines for the utilization of foreign funds received under the “prior permission” category.
2. Understanding FCRA
- The FCRA, enacted in 1976 during the Emergency, governs the acceptance and utilization of foreign contributions by individuals, associations, and organizations in India.
- Objective: Safeguarding sovereignty and democracy; Ensures that foreign funds are not used to affect electoral politics, public opinion, or policymaking in ways that undermine national interest.
- Governing Institution: The Union Ministry of Home Affairs (MHA) is the nodal ministry responsible for the registration, monitoring, and enforcement of the FCRA.
- FCRA, 2010 act: It has been enacted by the Parliament to consolidate the law to regulate the acceptance and utilization of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit acceptance and utilization of foreign contribution or foreign hospitality for any activities detrimental to national interest and for matters connected therewith or incidental thereto.
- In terms of FCRA, 2010 “person” includes ‒
- an individual;
- a Hindu undivided family;
- an association;
- a company registered under section 25 of the Companies Act,1956 (now Section 8 of Companies Act, 2013).
- Prohibitions: Certain entities are strictly prohibited from receiving foreign contributions, including:
- Candidates for election.
- Members of any Legislature (MP/MLA).
- Political parties or their office-bearers.
- Judges and government servants.
- Publishers/Editors of registered newspapers.
- Key Amendments (2020):
- Aadhaar Requirement: Made Aadhaar mandatory for all office-bearers of NGOs.
- FCRA Account: Required all foreign contributions to be received only in a designated “FCRA Account” opened in the State Bank of India, New Delhi Main Branch.
- Administrative Expenses: Capped the use of foreign funds for administrative purposes at 20% (reduced from the earlier 50%).
- Prohibition on Transfer: Prohibited the transfer of foreign contributions to any other person or organization.
- 2022 Amendments:
- Higher threshold for reporting foreign funds (from relatives): Limit increased from ₹1 lakh → ₹10 lakh.
- Extended reporting time (foreign contribution from relatives): Time increased from 30 days → 3 months.
Which of the following are prohibited from receiving foreign contributions under FCRA?
1. Election candidates
2. Members of Legislature
3. Judges
4. Government servants
Select the correct answer using the code below:
(a) 1 and 2 only
(b) 1, 2 and 3 only
(c) 2, 3 and 4 only
(d) 1, 2, 3 and 4
Answer: D
Explanation:
According to the Act, the following are prohibited:
1. Election Candidates: To prevent foreign interference in the democratic electoral process.
2. Members of Legislature: This includes Members of Parliament (MPs) and Members of Legislative Assemblies (MLAs).
3. Judges: To maintain the independence and impartiality of the judiciary.
4. Government Servants: Includes any person in the service or pay of the Government or remunerated by the Government for the performance of any public duty.
