LS passes bill to regulate foreign funding of `NGOs' in India
22 September 2020
The Lok Sabha on Monday unanimously passed a bill making Aadhaar mandatory for registration of organisations receiving foreign funds and to give the government powers to stop utilisation of foreign funds by an organisation through a "summary enquiry".
The amendment also seeks to route all foreign contribution through a designated 'FCRA Account' to be opened 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.
However, the amendment seeks to prohibit any transfer of foreign contribution to any other association or person.
Parties like the Congress, NCP, BSP and TMC have opposed the bill, while some political parties have demanded withdrawal of the bill.
The Foreign Contribution (Regulation) Amendment Bill, 2020, seeks to amend the Foreign Contribution (Regulation) Act, 2010, to include “public servants" in the prohibited category and decrease administrative expenses through foreign funds by an organisation to 20 per cent from 50 per cent earlier.
Introducing the bill in the House on Sunday, minister of state of home affairs Nityanand Rai said there was a need to streamline the provisions of the earlier 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 that are working for the welfare of the society.
The minister assured that amendment in the law is "not against any NGO as well as any religion". "FCRA is a national internal security law...This amendment is necessary for Aatmanirbhar Bharat," Rai said while clearing doubts of other MPs regarding the bill.
"This bill is not to suppress anyone but to control those who try to suppress the people of the country." Rai said the law does not breach the right of any organisation if they follow the law and do not get distracted from their purpose. "We only take action against any organisation under the rule when they do not follow the law," he added.
The intend of the Foreign Contribution (Regulation) Act, 2010 was to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain entities, including individuals, associations or companies, and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest, the minister pointed out.
Between 2010 and 2019, the annual inflow of foreign contribution has almost doubled, but many recipients of foreign contribution have not utilised the funds 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 between 2011 and 2019."
Criminal investigations also had to be initiated against dozens of such non-governmental organisations which indulged in outright misappropriation or misutilisation of foreign contribution, he said. Seeking to amend clause (c) of sub-section (1) of section 3 of the Act, the government has proposed to include "public servants" 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 move follows information received by the government that 19,000 organisations were not using received foreign funds for the specific purpose, BJP's Satyapal Malik informed the House.