FCRA AMENDMENTS AND IMPACT
Relevance: G.S paper II: POLITY AND GOVERNANCE
Context:
The amendments to the Foreign Contribution Regulation Act (FCRA) enacted in 2020 that among others made it compulsory for NGOs to open a bank account in Delhi has crippled the work of many organizations that are unable to receive foreign funds.
Details:
- An NGO has now moved the Delhi High Court seeking exemption from the Union Home Ministry’s March 31 deadline to open an FCRA account with the SBI branch in New Delhi.
- The petitioner argued that it applied to open the account before the March 31 deadline but the administrative delays on the part of the bank and the Ministry severely restricted its activities including providing COVID-19 relief and paying of urgent salaries of staff and also affected its charitable and educational activities.
- Many NGOs are affected by the new regulations as they are hampering charitable work during the pandemic.
Foreign Contribution (Regulation) Amendment, 2020:
- Foreign Contribution (Regulation) Amendment Bill, 2020 was passed in the Parliament in September 2020.
- The Home Ministry had directed all NGOs seeking foreign donations to open a designated FCRA account at the State Bank of India’s New Delhi branch by March 31, 2021.
- The NGOs registered under FCRA shall not receive any foreign donations in any other bank account from April 1, 2021.
Note:
- An FCRA registration is mandatory for NGOs to receive foreign funds.
Way Forward:
- The pandemic has underscored the importance of Vasudhaiva Kutumbakam (the whole earth is one family) as a framework for India’s global engagement.
- Thousands of NGOs serve extremely disadvantaged sections, at times filling in for the state, at others, supplementing it.
- Further relaxations are necessary in terms of opening an FCRA account with the SBI branch in New Delhi.
- For a global community to function, there is a need for a seamless sharing of ideas and resources across national boundaries.
- It should not be discouraged unless there is reason to believe the funds are being used to aid illegal activities.