The FCRA has become a tool to control civil society

No responsible democracy can object to regulating foreign contributions. Every sovereign nation has the right — and indeed the obligation — to ensure that foreign funds are received transparently, utilised lawfully and do not compromise national security or public order. Few would quarrel with that proposition. The difficulty arises when regulation gradually ceases to concern itself with money and begins to concern itself with institutions.

The latest amendments mark precisely such a transition. For years, the FCRA has regulated the receipt and utilisation of foreign contributions. The new rules, however, go substantially farther. They prescribe the purposes for which organisations may function, require them to predetermine the purposes and states in which they may operate, create fresh benchmarks for assessing organisational legitimacy and expand reporting obligations into areas extending far beyond financial accountability.

The consequence is a subtle but profound shift in philosophy. The state is no longer merely regulating foreign contributions; it is increasingly regulating the functioning of voluntary organisations themselves.

That distinction matters.

Civil society is not an extension of the government. Nor is it its adversary. It constitutes the constitutional space between the individual and the state, a space occupied by charitable institutions, educational establishments, humanitarian organisations, research bodies, faith-based charities, voluntary associations and countless community initiatives. Democracies flourish when this space remains vibrant, autonomous and diverse.

Our Constitution consciously protects this plural institutional landscape. It recognises the freedom to form associations. It guarantees freedom of conscience and the right to profess, practise and propagate religion. It protects the rights of minorities to establish and administer educational institutions. These guarantees were never intended to immunise organisations from regulation; equally, they were never intended to permit regulation to become an instrument for progressively narrowing their autonomy.

One provision of the new rules illustrates this concern vividly.
The Schedule appended to the Rules repeatedly excludes “proselytisation” from specified religious activities. At first sight, this may appear unobjectionable. No constitutional democracy can countenance conversion through force, fraud or coercion. The constitutional difficulty lies elsewhere.

The expression “proselytisation” finds no definition either in the parent Act or in the amended rules. It has no settled statutory meaning in Indian law. In effect, an undefined expression carrying potentially serious consequences has been introduced into subordinate legislation. The issue is therefore not theology, but legality.

The rule of law requires that restrictions affecting fundamental freedoms be expressed with reasonable certainty. Laws cannot leave citizens or institutions guessing where legality ends and illegality begins. When vague terminology is employed without objective statutory parameters, its practical meaning is left to executive interpretation. That inevitably leads to unbridled administrative discretion and increases the possibility of inconsistent or selective application.

The danger of vague law is not merely that it may be enforced arbitrarily. It is that it discourages perfectly lawful conduct. Institutions often begin censoring themselves long before the state actually intervenes. Constitutional freedoms are diminished not only by prosecution but also by uncertainty.

Equally significant are the amendments relating to reporting obligations.
Financial transparency is both legitimate and necessary. Yet the amended framework now requires disclosures extending to publications, articles, official websites, social media accounts and descriptions of institutional activities. The concern is not with transparency itself but with its expanding scope.

There is a constitutional distinction between monitoring how an organisation spends money and monitoring what it thinks or communicates.

That distinction acquires particular importance after the Constitution Bench decision in Justice K S Puttaswamy (Retd) vs Union of India, where the Supreme Court unequivocally recognised privacy as an intrinsic part of the right to life and personal liberty under Article 21. Privacy is not confined to physical spaces. It also encompasses informational autonomy—the individual’s and institution’s ability to control the dissemination of information about themselves. The judgment further held that every state intrusion into privacy must satisfy the constitutional tests of legality, necessity and proportionality.

Regulatory oversight cannot become synonymous with perpetual institutional surveillance. Rules exist to implement statutes, not to remake them. Parliament legislates. The Executive administers. This distinction lies at the heart of constitutional governance.

These concerns assume greater significance when viewed alongside the pending Foreign Contribution (Regulation) Amendment Bill, 2026, which proposes even more extensive governmental powers over institutions and assets.

This is unfortunate because India’s developmental history has been shaped not merely by governments but also by voluntary institutions. Mission hospitals, charitable schools, research organisations, relief agencies, community kitchens, tribal welfare institutions, organisations working among women, children, persons with disabilities and countless other public-spirited bodies have supplemented governmental efforts for decades. Their contribution to nation-building cannot be measured solely through financial statements.

The question before us, therefore, is not whether foreign contributions should be regulated. They undoubtedly should.

The real question is whether regulation should remain proportionate, constitutionally anchored and respectful of institutional autonomy, or gradually evolve into an instrument through which the executive determines how voluntary organisations are structured, where they may function, what they may think or communicate and how they should define themselves.

A confident democracy has little to fear from a vibrant civil society functioning within the bounds of law. Indeed, the strength of a constitutional republic lies not merely in the authority of the state but equally in the freedom of its citizens to organise, associate and serve society without unnecessary apprehension. Regulation must not diminish that constitutional space.

The present amendments must also be viewed against the broader trajectory of FCRA administration over the past 10 years. The new Rules do not emerge in isolation but represent the latest stage in a continuing process of progressively tightening regulatory control over India’s voluntary sector. During this period, thousands of FCRA registrations have been cancelled. Equally disquieting is the gradual diminution of transparency itself. Detailed organisation-wise information that was once publicly accessible through the Ministry’s FCRA portal has since been withdrawn, while even parliamentary questions seeking particulars of FCRA licence cancellations have repeatedly been disallowed on the ground that such information is “secret in nature”.

The paradox is striking: As compliance obligations imposed upon civil society become increasingly intrusive, public transparency regarding the exercise of regulatory power appears to have diminished. A constitutional democracy demands the opposite: Greater executive accountability as regulatory authority expands.

Brittas is Rajya Sabha Member of Parliament belonging to CPM and Babu is a research associate