Foreign Contribution Regulation Act (FCRA)

Foreign Contribution Regulation Act (FCRA)

Ministry of Home Affairs (MHA) warns NGOs using foreign funds without a valid FCRA license will face penalties under the FCRA, 2010 amended in 2020

  • Foreign contribution means donation, delivery or transfer made by any foreign source of any article, currency, or security.
  • Foreign funding of persons in India is regulated under FCRA act.
  • Implemented by – Ministry of Home Affairs
  • Individuals are permitted to accept foreign contributions without permission of MHA.
    • However, the monetary limit for acceptance of such foreign contributions shall be less than Rs. 25,000.
  • Validity – 5 years and NGOs are expected to apply for renewal within 6 months of date of expiry of registration.
  • FCRA criteria for Foreign Donations Recipients –
    • Organisations are required to register themselves every 5 years.
    • Recipients of foreign contributions adhere to the stated purpose for which such contribution has been obtained.
    • Open a bank account for the receipt of the foreign funds in State Bank of India, Delhi
  • Amending Foreign Contribution (Regulation) Rules, 2011, now individuals can send up to ₹10 lakhs without informing the government. (₹1 lakh earlier)
  • If amount exceeds ₹10 lakhs, individuals will have 3 months to inform the government against 30 days earlier.
  • Section 3 of FCRA act 2010 still bars political parties, legislature members, election candidates, government servants, judges, journalists, and media houses from receiving foreign contribution.
  • However, as per section 4(e) of FCRA,2010 and Rule 6 of FCRR ,2011, even the persons prohibited i.e., persons not permitted to accept foreign contribution, are allowed to accept foreign contribution from their relatives.
  • Time limit prescribed for intimation to Central Government for application of obtaining ‘registration’ or ‘prior permission’ under FCRA to receive funds has been increased from 15 days to 45 days.
  • List of compoundable offences under FCRA was increased to 12 from 7.

Source: HT


Previous Year Question

What does venture capital mean?

[UPSC Civil Services Exam – 2014 Prelims]

(a) A short-term capital provided to industries
(b) A long-term start-up capital provided to new entrepreneurs
(c) Funds provided to industries at times of incurring losses
(d) Funds provided for replacement and renovation of industries

Answer: (b)


Practice Question

Consider the following statements regarding the Foreign Contribution Regulation Act (FCRA):

  1. The FCRA was enacted to regulate foreign contributions and ensure they do not adversely affect internal security.
  2. Individuals are permitted to accept foreign contributions without the permission of the Ministry of Home Affairs (MHA).
  3. The FCRA requires NGOs to open an exclusive bank account with the Reserve Bank of India to receive foreign donations.

Which of the statements given above is/are correct?

 
 
 
 

Question 1 of 1

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