FCRA guidelines for NGOs

Context

The Ministry of Home Affairs (MHA) has withdrawn the permit under the Foreign Contribution Regulation Act (FCRA) for U.K.-based NGO ‘Save the Children (Bal Raksha Bharat)’.

Background

• Save The Children is a leading child rights’ organisation that focuses on health, education, hunger and vulnerable children in conflicts. It is present in 116 countries.
• Last year, the Central government raised concern on a fundraising campaign on malnutrition by the NGO, which was objected on the ground that the issue was being “vigorously pursued” by the government through its schemes.
• Government has also refused to extend its license, which was valid till November 2021.
  • Non-extension of License leads to cut down the source of income for NGOs and their facility to receive foreign funding.

The FCRA registration is a mandatory requirement for receiving foreign funds.

• The government has cancelled the FCRA registration of 1,827 NGOs in the last five years, according to information.
• These NGOs include Oxfam International and think-tank Centre for Policy Research.

What is Foreign Contribution Regulation Act (FCRA)?

• FCRA was enacted during the Emergency in 1976 amid apprehensions that foreign powers were interfering in India’s affairs by pumping money into the country through independent organisations.

What is NGO? A Non-Governmental Organisation (NGO) is a non-profitable charitable organization. In India, NGOs established under Section 8 of the Companies Act are governed by the provisions of the Companies Act, 2013, while the NGOs established as a trust or society are governed by the state governments.

• Objective: The law sought to regulate foreign donations to individuals and associations so that they functioned in a manner consistent with the values of a sovereign democratic republic.
• Criteria to seek FCRA registration: The FCRA requires every person or NGO seeking to receive foreign donations to be:
  • registered under the Act
  • to open a bank account for the receipt of the foreign funds in State Bank of India, Delhi
  • to utilize those funds only for the purpose for which they have been received and as stipulated in the Act
  • FCRA registrations are granted to individuals or associations that have definite cultural, economic, educational, religious, and social programmes.
• Exceptions:
  • Under the FCRA, the applicant should not be fictitious and should not have been prosecuted or convicted for indulging in activities aimed at conversion through inducement or force, either directly or indirectly, from one religious faith to another.
  • The applicant should also not have been prosecuted for or convicted of creating communal tension or disharmony.
  • Also, should not be engaged or likely to be engaged in the propagation of sedition.
  • The Act prohibits the receipt of foreign funds by candidates for elections, journalists or newspaper and media broadcast companies, judges and government servants, members of legislature and political parties or their office-bearers, and organizations of a political nature.

NGO DARPAN Portal

• In India, the government has put efforts into encouraging NGO financing.
• The government created an online portal, NGO DARPAN, to promote and create a healthy partnership between NGOs and the Government of India and speed up the financing process.
• The NGO DARPAN portal serves as an interface between NGOs and other government departments.

Power to grant registrations under FCRA:

• FCRA registration is valid for5 years, and NGOs are expected to apply for renewal within six months of the date of expiry of registration.
• The government can also cancel the FCRA registration of any NGO if it finds that the NGO is in violation of the Act, if it has not been engaged in any reasonable activity in its chosen field for the benefit of society fortwo consecutive years, or if it has become defunct.
• Once the registration of an NGO is cancelled, it is not eligible for re-registration for three years.