FCRA – A tool of Governance or Suppression

FCRA – A tool of Governance or Suppression

What is FCRA?

  • Foreign Contribution (Regulation) Act, of 2010 repeals and replaces the Foreign Contribution (Regulation) Act, of 1976. It regulates the acceptance and utilization of foreign contributions by certain individuals or associations.
  • For any suspicion of violation of the act viz., acts detrimental to the national interest, MHA can use any agency, including IB, for getting info over the association.

The following persons are prohibited from accepting foreign contributions

  • Candidate for election.
  • Registered newspaper and any association involved in the transmission of any news-related item.
  • Judge, government servant, or employee of any entity controlled or owned by the government.
  • Member of any Legislature.
  • A political party or its office bearers.
  • Organizations of a political nature as may be specified.

However, foreign contributions can be accepted by the above-mentioned persons in the following specific situation

  • By way of remuneration or payment for services rendered.
  • As an agent of a foreign source in relation to any transaction made by such foreign source with the Central or State Government.
  • By way of gift or presentation as a member of any Indian delegation.
  • From his relative.
  • By way of any scholarship, stipend, or any payment of like nature.


  • It was brought by Indira Gandhi during the Emergency with the ostensible aim to curb foreign interference in domestic politics (due to the cold war). Actually, the aim was to clamp down on political dissent.
  • With the 1991 reforms, the Indian state had no problem accepting contributions from foreign donors such as the World Bank or IMF.


  • Under FCRA 1976, FCRA registration was permanent but under the 2010 law, it is for 5 years only. This gave a state an invisible whip to bring errant ‘organizations’ to heel.
  • Only 50% of the foreign funds could be used for administrative expenses. Thus controlling their administrative capacities.
  • FCRA 1976 primarily aimed at political parties but FCRA 2010 restates it as “organizations of a political nature”. Viz., now it includes any organization which engages itself in common methods of political action like ‘bandh’ or ‘hartal’, or ‘jail bar, etc in support of public causes.
  • Individuals are permitted to accept foreign contributions without the permission of MHA. However, the monetary limit for acceptance of such foreign contributions shall be less than Rs. 25,000.

Foreign Contribution (Regulation) Amendment (FCRA), 2020

  • Restrictions on the transfer of foreign contribution money to other organizations.
    • It will severely limit inter-organizational cooperation, and smaller, locally active NGOs risk running out of money.
    • This would also impair the flow of international finance and help with development.
  • Restricts administrative expenses to 20% of an NGO’s budget.
    • It will impact the salaries of employees and the ability of NGOs to draw various experts.
  • Every organization must have its FCRA account in only one SBI branch in Delhi.
    • In an age of internet connectedness and computerized financial transactions, this may be a step backward.
    • It will also affect the movement of funds in remote locations.
  • Increased the power of government officers to investigate breaches.
    • Government interference may obstruct working in critical areas such as Tribal Welfare in LWE-affected areas.
  • Proposed National Council of Social Work (Education and Practice) Bill, which regulates social work education.
    • This council is intended to encourage social work professionals to act ethically, but it may make it much more difficult for those without degrees to get employment in the NGO sector.

The issue with FCRA

  • These changes are not in sync with the ideals of human rights, environmentalism, and civil liberties (important pillars of India’s Soft Power) as these sectors receive most of the foreign contributions.
  • Oxfam’s license was not renewed because Oxfam was publishing papers on the pandemic’s effects on the poor and the hardship of migrant workers that were widely read.
  • The Commonwealth Human Rights Initiative’s license was revoked after its FCRA clearance was briefly suspended.
  • Attacks against NGOs that have tirelessly fought for minority rights, like Amnesty International and the Centre for Equity Studies, were made using the Enforcement Directorate (ED).

Noel Harper V/s Union of India

Supreme court while upholding the FCRA 2020 has opined the following –

  • It was decided that accepting foreign donations may be controlled by the Parliament and that they couldn’t be an absolute right.
  • Supreme court used the Drug vs. Alcohol Metaphor: As long as it is used discreetly and in moderation, Foreign Contributions act as a medication. However, a free and unrestrained influx of foreign aid has the potential to be a depressant that threatens the sovereignty and integrity of the state.

Thus, it is evident that the amendment to FCRA and the original FCRA, though in principle may not be very bad. But in real life may become a case of the chilling effect on free speech. It is necessary that the government must alley such fear and stop the alleged misuse of FCRA.



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Plutus ias current affairs eng med 30 July 2022

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