Foreign Contribution Regulation Amendment Act, 2020
Transparency has always been an important missing essence in foreign contributions in India.
Foreign Contribution means the fund which is provided by a foreign-based individual, group, company, or firm to the associations formed in other countries for a cause. So for the sake of transparency and regulation of foreign funds, Indian Government firstly enacted the “Foreign Contribution Regulation Act” in 1976.
What is “Foreign Contribution Regulation Act”?
The Foreign Contribution Regulation Act regulates foreign donations and ensures the
internal security of our country must not contrarily be effected by such contributions. It was amended in 2010 for adding some more measures to ensure proper regulations of the funds. All associations, groups, NGO’s which intend to receive foreign contribution comes under the ambit of FCRA.
So far, this year under the Foreign Contribution Regulation Act, 2010 Licences of 13 Non-governmental organisations (NGO’s) have been suspended. Their bank accounts were frozen and FCRA certificates were suspended. “Serious adverse inputs” were received to the Ministry of Home Affairs (MHA) regarding the working of several NGO’s which come under the ambit of the FCRA in tribal areas.
In a recent statics collection by the Central Bureau of Investigation information cell from all the state and union territories, it is found that India has 31 lakh NGOs, more than double the number of schools, and Less than 10% of the NGOs have complied with the requirement of submitting balance sheets and income-expenditure statements with the Registrar of Societies, Approximately financial statements submitted only by 2.9 lakh NGO’s. The foreign contribution increased to double during the period of 2010-19 and it is observed by the government that the funding is not used for the motive they are received, many NGO’s fails to comply with the requirements of financial statements and annual audit reports. So to regulate the fund receive through the foreign sources government amend amended the Foreign Contribution Regulation Act, 2010.
Foreign Contribution Regulation Act Amendment 2020.
PROHIBITION TO ACCEPT FOREIGN CONTRIBUTION
Under the Act, certain persons like election candidates, editors, or publishers of a newspaper, judges, government servants, etc. are prohibited to accept any foreign contribution. The Bill adds public servants to this list.
Public servant includes any person who is in service or pays of the government or remunerated by the government for the performance of any public duty.
AADHAAR FOR REGISTRATION
Any person seeking prior permission, registration, or renewal of registration must provide the Aadhaar number of all its office bearers.
In the case of a foreigner, they must provide a copy of the passport or the Overseas Citizen of India card for identification.
FCRA ACCOUNT
Foreign contributions must be received only in an account designated by the bank as “FCRA account” in such a branch of the State Bank of India, New Delhi, as notified by the central government.
No funds other than the foreign contribution should be received or deposited in this account.
The person may open another FCRA account in any scheduled bank of their choice for keeping or utilizing the received contribution.
RENEWAL OF LICENSE
Under the Act, every person who has been given a certificate of registration must renew the certificate within six months of expiration.
The Bill provides that the government may conduct an inquiry before renewing the certificate to ensure that the person making the application:-
(i) Is not fictitious or benami,
(ii) Has not been prosecuted or convicted for creating communal tension or indulging in activities aimed at religious conversion, and
(iii) Has not been found guilty of diversion or misutilisation of funds
SURRENDER OF CERTIFICATE
Under the Act, the government may suspend the registration of a person for a period not exceeding 180 days. The Bill adds that such suspension may be extended up to an additional 180 days.
These are the changes done by the legislature through the foreign contribution regulation act Amendment 2020 to control and regulate the foreign funding’s and ensure that the foreign contribution will not be used against the internal security of the state or in any other malicious acts.
Government’s Stand
Indian government passed this bill for the sake of transparency and fund regulation which is provided by the foreign individuals, companies, groups to the associations in India for a cause. Political parties also come under the ambit of associations and they also receive foreign donations but the Lok Sabha in 2018 pass a bill that exempts political parties from foreign funding scrutiny, without debate. So the question raises here where is the transparency?
CONCERNS RAISED
Why did the government want to limit the administrative expenses to 20%?
The Opposition also raised concerns over the government’s proposal to make Aadhaar a mandatory identification document for all office-bearers. While the Supreme Court has said that Aadhaar Card is not compulsory then why should you make Aadhaar card compulsory?
The international commission of jurist condemns this act and said,
It will “undermine the work of civil society”. “The legislation fails to comply with India’s international legal obligations and constitutional provisions to respect and protect the rights to freedom of association, expression, and freedom of assembly,”
CONCLUSION
At one hand, the bill is meant to “bring in transparency” and “stop misuse of foreign contributions by people”.
On the other, the proposed amendments will increase the cost of doing business for India’s non-profits and may make them further vulnerable to harassment.
Law must be equal to all why only some specific institutions get exemptions from the law.
By-
Nimit Saroha
Student Reporter, INBA