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Introduced: Lok Sabha (20th Sept 2020)
Passed: Lok Sabha (21st Sept 2020)
Passed: Rajya Sabha (23rd Sept 2020)
Present status: Received assent of the President on 28th Sept 2020 & converted to Act.
Background of Foreign Contribution Regulation Act (FCRA)
- The Foreign Contribution Regulation Act (FCRA) was first brought in by the Indira Gandhi government during the Emergency in 1976.
- Its aim was to protect the ‘sovereignty’ of India from ‘foreign hands’ at a time when global powers were engaged in a cold war.
- The law prohibited political parties, electoral candidates and even cartoonists from accepting foreign contributions.
- In 2010, the government made the renewal of registrations mandatory every five years and placed a 50% limit on administrative expenses.
About Foreign Contribution Regulation (Amendment)Act, 2020
Ministry: Finance
Aim: The Act amended the Foreign Contribution (Regulation) Act, 2010.
Key provisions of Foreign Contribution Regulation (Amendment)Act, 2020
- Prohibition to accept foreign contribution: These include: election candidates, editor or publisher of a newspaper, judges, government servants, members of any legislature, and political parties.
- Transfer of foreign contribution:
- Under the Act, foreign contribution cannot be transferred to any other person unless such person is also registered to accept foreign contribution.
- FCRA registered organisations are barred from transferring foreign donations to smaller non-profits (a practice known as sub-granting) who often find it difficult to access donors on their own.
- Aadhaar for registration: The Act states that a person may accept foreign contribution if they have obtained a certificate of registration from central government or obtained prior permission from the government to accept foreign contribution. The bill makes Aadhaar mandatory for registration.
- Restriction in utilisation of foreign contribution: The Bill gives government powers to stop utilisation of foreign funds by an organisation through a “summary enquiry”.
- Reduction in use of foreign contribution for administrative purposes: The bill decreases administrative expenses through foreign funds by an organisation to 20% from 50% earlier.
- More power to government: FCRA registration can be suspended now after a summary enquiry and the period of suspension can extend up to a year (from 180 days earlier).
