What is Foreign Contribution Registration Act (FCRA) ?

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June 6, 2024

What is Foreign Contribution Registration Act (FCRA) ?

Why in News?Bollywood megastar Shah Rukh Khan’s non-governmental organisation (NGO), Meer Foundation, has been granted Foreign Contribution Registration Act (FCRA) licence by the Ministry of Home Affairs (MHA) for five years.

The Foreign Contribution (Regulation) Act, or FCRA, is a law enacted by the Indian government in 2010. It regulates how NGOs, individuals, and companies in India can receive foreign donations (financial or in-kind) and foreign hospitality.

Key Objectives of FCRA:

  • Transparency and Accountability: The FCRA ensures that foreign funding received by Indian entities is used for legitimate purposes and doesn’t undermine national security.
  • Preventing Misuse of Funds: It aims to prevent foreign funds from being used for activities that could be detrimental to India’s interests, such as terrorism or religious extremism.
  • Promoting Orderly Receipt of Donations: The act establishes a system for registering recipients of foreign funds and monitoring their activities.

Key Provisions of FCRA:

  • Registration Requirement: Any individual, association, or company that intends to receive foreign contributions exceeding a certain amount (specified by the government) must register under the FCRA.
  • Restrictions on Donations: The FCRA restricts foreign donations to certain categories of activities, such as social, educational, religious, economic, and cultural programs.
  • Prior Permission: For certain types of foreign contributions or for donations exceeding a certain limit, prior permission from the government is mandatory.
  • Utilization of Funds: Recipients of foreign funds must utilize them for the specific purpose for which they were received and maintain proper accounts.
  • Reporting Requirements: Registered entities must file annual reports with the government detailing their receipts and utilization of foreign funds.

Criticisms of FCRA:

  • Overly Restrictive: Some critics argue that the FCRA is overly restrictive and hinders the functioning of NGOs that rely on foreign funding for their social welfare activities.
  • Bureaucratic Burden: The registration and reporting requirements can be cumbersome and time-consuming for NGOs.
  • Selective Enforcement: There have been allegations that the FCRA is enforced selectively, targeting NGOs critical of the government.

Recent Developments:

  • The FCRA has been amended several times since its enactment, with the government tightening regulations in recent years.
  • These amendments have made it more challenging for NGOs to receive foreign funds, raising concerns about the impact on civil society.

The FCRA remains a contentious issue in India, with ongoing debate about the balance between national security concerns and the freedom of NGOs to operate.

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What is Foreign Contribution Registration Act (FCRA) ? | Vaid ICS Institute