Daily Current Affairs : 19-October-2023

The Foreign Contribution (Regulation) Act (FCRA), 2010, was established during the Emergency in 1976 to regulate foreign donations to ensure they align with India’s sovereign democratic values. The recent Foreign Contribution (Regulation) Amendment Act, 2020, introduced significant changes, highlighting the need for a deeper examination of its implications.

What is the FCRA?

The FCRA, an essential regulatory measure, oversees the acceptance and utilization of foreign contributions by individuals, associations, or companies in India. Key aspects of the FCRA include:

  • Regulation of foreign funding to NGOs in India.
  • Prohibition of foreign contributions for activities detrimental to national interest.
  • Requirement for organizations to register every five years.
Issues Related to FCRA Implementation

Several challenges arise from the vague definitions within FCRA:

  • Lack of clarity on “public interest” and “economic interest,” leading to arbitrary decisions.
  • Potential biases in favor of the government, limiting NGOs’ freedom of expression and association.
  • Concerns raised by the UN Special Rapporteur on the Rights to Freedom of Peaceful Assembly and of Association, highlighting the Act’s lack of legitimate restrictions.
Impact on Non-Governmental Organizations (NGOs) in India

NGOs in India play a vital role in diverse sectors, supported by government ministries and foreign funding. However, the FCRA’s ambiguous guidelines have far-reaching consequences:

  • NGOs operate under various Acts like the Indian Societies Registration Act, 1860, and the Indian Trusts Act, receiving both government and foreign funding.
  • Limited NGOs receive substantial government funds, while others rely on foreign contributions, highlighting the importance of FCRA compliance.
  • More than 22,500 FCRA-registered NGOs exist, focusing on social, educational, religious, economic, and cultural purposes.

Important Points

  • FCRA Overview:
    • Enacted in 1976 to regulate foreign donations in India.
    • Aims to ensure donations align with India’s democratic values.
  • Key Points about FCRA:
    • Regulates foreign funding to NGOs in India.
    • Prohibits foreign contributions detrimental to national interest.
    • Requires organizations to register every five years.
  • FCRA Amendment Act, 2020:
    • Bars public servants from receiving foreign contributions.
    • Makes Aadhaar number mandatory for office bearers receiving foreign contributions.
    • Specifies that foreign contributions must be received only in designated FCRA accounts.
    • Limits administrative expenses to 20% of total foreign funds received (reduced from 50%).
  • Issues Related to FCRA:
    • Lack of clarity on terms like “public interest” and “economic interest.”
    • Potential biases in favor of the government, impacting NGOs’ freedom of expression and association.
    • Concerns raised by the UN Special Rapporteur regarding vague restrictions.
  • NGOs in India:
    • Operate under various Acts such as the Indian Societies Registration Act, 1860, and Indian Trusts Act.
    • Limited NGOs receive significant government funds; others rely on foreign contributions.
    • Over 22,500 FCRA-registered NGOs in India focus on social, educational, religious, economic, and cultural purposes.
Why In News

Recent data from the Ministry of Home Affairs has revealed a concerning trend related to the registration of non-governmental organizations (NGOs) under the Foreign Contribution (Regulation) Act (FCRA), 2010 in India, indicating a pressing need for comprehensive reforms in the regulatory framework governing the functioning of these organizations to ensure transparency and accountability.

MCQs about FCRA Challenges: Empowering NGOs in India

  1. What is the main objective of the Foreign Contribution (Regulation) Act (FCRA) in India?
    A. To regulate foreign funding to NGOs in India.
    B. To promote political activities through foreign contributions.
    C. To encourage unrestricted foreign funding for all organizations.
    D. To limit NGOs’ involvement in social activities.
    Correct Answer: A. To regulate foreign funding to NGOs in India.
    Explanation: The FCRA’s primary objective is to regulate foreign donations to ensure they align with India’s democratic values and do not harm national interest.
  2. What is the significance of the Foreign Contribution (Regulation) Amendment Act, 2020?
    A. It increased the limit of administrative expenses for NGOs.
    B. It made Aadhaar number optional for NGOs receiving foreign contributions.
    C. It introduced clear guidelines on “public interest” in FCRA decisions.
    D. It reduced administrative expenses and made Aadhaar number mandatory for key functionaries.
    Correct Answer: D. It reduced administrative expenses and made Aadhaar number mandatory for key functionaries.
    Explanation: The FCRA Amendment Act, 2020, reduced the limit of administrative expenses to 20% and made Aadhaar number mandatory for office bearers receiving foreign contributions.
  3. What concern is raised regarding the FCRA’s impact on NGOs in India?
    A. Limited government funding for NGOs.
    B. Biases in favor of the government and potential restrictions on freedom of expression.
    C. Lack of foreign funding for social causes.
    D. Excessive paperwork for NGO registration.
    Correct Answer: B. Biases in favor of the government and potential restrictions on freedom of expression.
    Explanation: T FCRA leading to biases in favor of the government and impacting NGOs’ freedom of expression and association.

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