Parliament proceedings | Government tables Bill to amend Foreign Contribution (Regulation) Act

Bid to enhance transparency; it will make Aadhaar mandatory.

Updated - December 04, 2021 10:46 pm IST

Published - September 20, 2020 01:03 pm IST - New Delhi

NEW DELHI, 29/04/2016: Indian Rupee is ruling 20 months high against US Dollar, A scene of US Dollars being counted, in New Delhi.  
Photo: V. Sudershan

NEW DELHI, 29/04/2016: Indian Rupee is ruling 20 months high against US Dollar, A scene of US Dollars being counted, in New Delhi. Photo: V. Sudershan

The Centre is set to amend the Foreign Contribution (Regulation) Act and proposes to make Aadhaar a mandatory identification document for all the office-bearers, directors and other key functionaries of an NGO or an association eligible to receive foreign donations.

The Foreign Contribution (Regulation) Amendment Bill, 2020, was introduced in the Lok Sabha on Sunday by Minister of State for Home Nityanand Rai.

The Hindu Explains | What is Foreign Contribution (Regulation) Act, and how does it control donations?

The Bill says the amendment is required to enhance transparency and accountability in the receipt and utilisation of foreign contributions worth thousands of crores of rupees every year and facilitating the “genuine” non-governmental organisations or associations who are working for the welfare of society.

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.

Bars public servants

“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.

Also read |PM CARES Fund gets FCRA exemption without meeting pre-condition of CAG audit

In 2016, the Home Ministry had cancelled the licence of Lawyers Collective, run by noted lawyers Indira Jaising and Anand Grover for various violations. The Ministry, in its suspension notice, had said that Ms. Jaising — as a government servant — had received foreign funds over ₹96 crore when she held the post of Additional Solicitor General (ASG) between the years 2009 and 2014 , in violation of FCRA norms.

Ms Jaising refuted the Ministry’s allegations and had said she was a “public servant” not “government servant.”

FCRA regulates foreign donations and ensures that such contributions do not adversely affect the internal security of the country. The Act, first enacted in 1976 was amended in the year 2010 when a slew of new measures were taken by the Union Home Ministry to regulate foreign donations.

The Bill proposes that not more than 20% of the total foreign funds received could be defrayed for administrative expenses. At present the limit is 50%.

The Statement of Objects and Reasons of the Bill further states, “The Foreign Contribution (Regulation) Act, 2010 was enacted to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected therewith or incidental thereto.”

The Bill says that the said Act has come into force on May 1, 2011 and has been amended twice. The first amendment was made by section 236 of the Finance Act, 2016 and the second amendment was made by section 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.

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