FCRA amendment bill proposes reduction of foreign funds for admin expenses to 20%, mandates use of Aadhaar as ID

Center is good to go to amend the Foreign Contribution (Regulation) Act. A draft of the Bill says that the correction is needed to improve straightforwardness and responsibility in the receipt and use of unfamiliar commitment worth a thousands of crores of rupees consistently and encouraging “genuine” non-governmental organisations or associations who are working for the welfare of the society.

FCRA directs foreign donations and experts that such commitments don't antagonistically influence the inward security of the nation. The Act, first sanctioned in quite a while corrected in the year 2010 when a huge number of new measures were taken by the Union Home Ministry to direct foreign donations.

The Statement of Objects and Reasons of the Bill further expresses, "The Foreign Contribution (Regulation) Act, 2010 was instituted to direct the acknowledgment and use of unfamiliar commitment or unfamiliar neighborliness by specific people or affiliations or organizations and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any exercises hindering to the public intrigue and for issues associated therewith or coincidental thereto."

The draft says that the said Act has come into power on May 1, 2011 and has been changed twice. The principal correction was made by segment 236 of the Finance Act, 2016 and the subsequent alteration was made by segment 220 of the Finance Act, 2018.

“The annual inflow of foreign contribution has almost doubled between the years 2010 and 2019, but many recipients of foreign contribution have not utilised the same for the purpose for which they were registered or granted prior permission under the said Act. Many of them were also found wanting in ensuring basic statutory compliances such as submission of annual returns and maintenance of proper accounts. This has led to a situation where the Central Government had to cancel certificates of registration of more than 19,000 recipient organisations, including non-Governmental organisations, during the period between 2011 and 2019. The criminal investigations also had to be initiated against dozens of such non-Governmental organisations which indulged in outright misappropriation or mis-utilisation of foreign contribution,” the draft said.

Know Key Changes Proposed The Foreign Contribution (Regulation) Amendment Bill, 2020

1. Until now the NGOs were allowed to use 50 percent of their foreign funding to meet regulatory costs. The new FCRA correction expresses that NGOs can't utilize more than 20 percent of the foreign contributions to meet their regulatory costs like paying pay rates. It additionally bans any community worker from getting any foreign funds. The meaning of public servants would be spread out according to the Section 21 of the IPC.
2. Under the amendment any new FCRA registration and renewal of FCRA permit will require the Aadhaar number of all office carriers or a duplicate of visa or OCI card in the event of a foreigner. The government further proposes to make Aadhaar cards a required ID archive for all office-carriers, chiefs and other key functionaries of NGOs or affiliations qualified to get foreign donations.
3. The Bill proposes to include “public servant” and “corporation owned or controlled by the Government” among the list of entities who are not eligible to receive foreign donations, the draft says. “Amendment of clause (c) of sub-section (1) of section 3 to include “public servant” also within its ambit, to provide that no foreign contribution shall be accepted by any public servant,” the Bill says.
4. The new FCRA, if passed, will also “prohibit any transfer of foreign contribution to any association/person”.
5. A clause in the bill states that it will allow for the central government to hold a summary inquiry to direct bodies with FCRA approval to “not utilise the unutilised foreign contribution or receive the remaining portion of foreign contribution”.

The clause states: “Provided the central government, on the basis of any information or report, and after holding a summary inquiry, has reason to believe that a person who has been granted prior permission has contravened any of the provisions of this act, it may, pending any further inquiry, direct that such person shall not utilise the unutilised foreign contribution or receive the remaining portion of foreign contribution which has not been received or, as the case may be, any additional foreign contribution, without prior approval of the central government.”