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Govt set to amend FCRA, to make Aadhaar mandatory for foreign contribution

The FCRA Bill, 2020, says the need to strengthen the Act has arisen due to several organisation "misutilising or misappropriating" the funds leading to the government cancelling 19,000 such registrations in the past few years.

Written by Deeptiman Tiwary | New Delhi |
Updated: September 20, 2020 3:26:56 pm
FCRA, Foreign Contribution Regulation Act, FCRA bill, FCRA aadhaar, Amit Shah, foreign funds, lok sabha, lok sabha news, indian expressThe Foreign Contribution (Regulation) Amendment Bill, 2020 will be introduced in Lok Sabha by Home Minister Amit Shah.

The government on Sunday sought to make provisions of the Foreign Contribution Regulation Act (FCRA), 2011 more stringent through a bill that proposes to include “public servants” in the prohibited category, decrease administrative expenses through foreign funds by an organisation to 20% from 50% earlier, make Aadhaar mandatory for registration and give government powers to stop utilisation of foreign funds by an organisation through a “summary enquiry”.

The Foreign Contribution (Regulation) Amendment Bill, 2020, to be introduced in Lok Sabha by Home Minister Amit Shah at 3 pm, says the need to strengthen the Act has arisen due to several organisation “misutilising or misappropriating” the funds leading to the government cancelling 19,000 such registrations in the past few years.

“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 Bill’s statement of objects and reasons says.

The government has said there is a need to streamline the provisions of the said Act by “strengthening the compliance mechanism, enhancing transparency and accountability in the receipt and utilisation of foreign contribution worth thousands of crores of rupees every year and facilitating genuine non-Governmental organisations or associations who are working for the welfare of the society”.

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Seeking to amend clause (c) of sub-section (1) of section 3 of the Act, the government has proposed to include “public servant” also within its ambit, to provide that no foreign contribution shall be accepted by them. Earlier, it was restricted to legislators, election candidates, journalists, print and broadcast media, judges, government servants or employees of any corporation or any other body controlled or owned by the Government.

It has also sought to prohibit any transfer of foreign contribution to any other association or person. Amendment of section 17 of the ACT has sought to provide that every person who has been granted certificate or prior permission under section 12 shall receive foreign contribution only in an account designated as ‘‘FCRA Account’’ which shall be opened by him in such branch of the State Bank of India at New Delhi, as the Central Government may, by notification, specify. It has, however, allowed the organisation to transfer these funds to another account for utilisation.

The government has also sought to give itself considerable powers in deciding which organisation, if it has obtained prior permission from the government for foreign contribution, shall cease to utilise its funds. The amendment sought to Section 11 of the Act gives government powers to stop utilisation of received but unutilised funds following a “summary enquiry”. Earlier it was supposed to be done only after the person or association has been “found guilty” of violation of the Act.

“Provided that 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,” the amendment sought to Section 11 says in the Bill.

Regarding suspension of registration under the Act, the amendment to Section 13 has sought to give the government the power to decide on the period of suspension beyond 180 days. “In section 13 of the principal Act, in sub-section (1), for the words ‘for such period not exceeding one hundred and eighty days as may be specified’, the words ‘for a period of one hundred and eighty days, or such further period, not exceeding one hundred and eighty days, as may be specified’ shall be substituted,” the Bill has said.

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