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Cancellation of FCRA Registration for NGOs |

Cancellation of FCRA Registration for NGOs

Context

∙ Recently, the Foreign Contributionof two prominent  non-governmental organizations (NGOs) — Centre for Policy Research (CPR) and World Vision India (WVI) have been canceled.

About

∙ non-governmental organizations (NGOs) — Centre for Policy Research (CPR) and World Vision India (WVI) have been canceled.

∙ significant resources, like Manpower.

∙ Issue of dissolution: Prematurely dissolution on account of a vote of no-confidence.

∙ Holding simultaneous elections for the whole country has many practical difficulties for the Election Commission.

∙ It raises the question if the ruling party holds an absolute majority in all 29 states. Thus, whether new elections would be required.

∙ Disadvantage for regional parties: It will help the dominant national party or the incumbent at the Centre.

Conclusion

∙ The idea of simultaneous elections could potentially bring about several benefits, but it also presents

∙ The MHA alleged that CPR diverted foreign donations to fund “protests and legal battles against developmental projects” and misused funds to “affect India’s economic interests.”

∙ Since 2015, the FCRA registration of more than 16,000 NGOs have been canceled on account of violation. Currently there are 16,989 FCRA-registered NGOs active in the country.

What is Foreign Contribution Regulation Act, 2010

∙ FCRA aims to regulate the acceptance and utilization of foreign contributions to prohibit activities detrimental to the national interest.

∙ Origin: It was first enacted in 1976 but repealed and later replaced with new legislation in 2010. It was further amended in 2020.

∙ Provisions of the Act are as;

∙ Every person or NGO wishing to receive foreign donations to be registered under the Act,

∙ Registered groups can receive foreign contributions for social, educational, religious, economic and cultural programmes.

∙ To utilize the funds only for the purpose for which they have been received, and as stipulated in the Act.

∙ They are also required to file annual returns, and they must not transfer the funds to another NGO.

∙ The Act prohibits 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.

∙ 2020 Amendment: Prohibiting the transfer of foreign contribution to any other person or organization.

∙ Reducing the limit of usage of foreign contribution for administrative expenses from 50% to 20%.

∙ FCRA 2022 Rules: In July 2022, the MHA introduced changes to FCRA rules. These changes included increasing the number of compoundable offences from 7 to 12.

∙ The regulations also increased the threshold for contributions from overseas relatives, which can be made without the need for government notification, from Rs 1 lakh to Rs 10 lakh. Additionally, the timeframe for informing the government about the opening of bank accounts was extended.

∙ Validity: The registration is valid for five years, after which the NGO has to apply for a renewal.

∙ The Union Ministry of Home Affairs (MHA) monitors the implementation of the FCRA to ensure that such funds do not adversely affect the country’s internal security.

Importance of regulating foreign contributions in India

∙ Preventing interference in Indian affairs: The FCRA was enacted to prevent foreign powers from interfering in India’s affairs by regulating foreign donations to individuals and associations.

∙ Transparency and accountability: The FCRA ensures transparency and accountability which is important to prevent misuse of funds.

∙ The MHA has also raised concerns that the NGOsin India are vulnerable to the risks of money laundering and terrorist financing.

∙ National security: The FCRA also helps in safeguarding national security interests by preventing foreign entities from funding activities that could be detrimental to India’s security.

Challenges of regulating foreign contributions

∙ Administrative Delays: The registration and renewal process under the FCRA can take a long time which delays their work and impacts their ability to receive funding.

∙ Political Interference: The government’s discretionary powers to cancel registrations or freeze accounts of NGOs have been misused in some cases to target NGOs critical of the government, leading to accusations of political interference.

∙ Hinders social and economic development: Stringent Compliance Requirements of foreign contributions affects the social and economic development in India.

∙ Lack of Transparency: Some NGOs have been criticized for lacking transparency in their utilization of foreign funds received under the FCRA.

∙ Concerns often arise when the specific purposes and beneficiaries of these funds are not clearly disclosed.

Way ahead

∙ While the FCRA has undergone amendments, the challenges in its implementation remain, such as the difficulty in balancing the need for transparency and accountability with the need to protect the autonomy of civil society organizations.

∙ Nonetheless, it is essential to continue working towards effective implementation of the FCRA to prevent misuse of foreign funds and ensure the transparency and accountability of NGOs in India.

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