Lok Sabha passes FCRA Amendment Bill, 2020; Aadhaar mandatory for NGO Office-bearers

New Delhi Sept 21-2020: Lok Sabha passed a bill on Monday to amend the Foreign Contribution (Regulation) Act that seeks to make it mandatory for the office-bearers of an NGO to provide their Aadhaar numbers during registration.

Amid concerns raised by various opposition members about The Foreign Contribution (Regulation) Amendment Bill, 2020, minister of state for home Nityanand Rai said the legislation was not against any religion or NGO.

The bill was passed after a debate.

What is FCRA Registration ?

An NGO is registered under the FCRA, 2010 or granted Prior Permission by Central government for receiving and utilising foreign funds/contribution.

It can receive and utilize such contribution for a definite cultural, economic, educational, religious or social programme as provided under Section 11 of the Act.

The Act came into force on May 1, 2011 and has been amended twice. The first amendment was made by section 236 of the Finance Act, 2016 and the second by section 220 of the Finance Act, 2018.

Amendments passed by Lok Sabha

The bill proposes to enable the Centre to allow an NGO or association to surrender its FCRA certificate. Such surrender may be allowed, if, after making an inquiry, the Centre is satisfied that such person has not violated any provision of the Act and the management of foreign funds and assets created out of foreign contribution is vested in the competent authority.

The draft bill also proposes that not more than 20 per cent of the total foreign funds received could be spent on administrative expenses. Presently, the limit is 50 per cent.

The bill provides for the insertion of a new section 12A empowering the Central government to require Aadhaar number, etc as an identification document.

Amendment of section 17 provides that every person who has been granted a 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 government may, by notification, specify. However, the entities may also open one or more accounts in other banks for keeping or utilising the foreign contribution received from his FCRA account in SBI, New Delhi.

Public servants will be barred from receiving any foreign contribution and the NGOs or associations registered under the Foreign Contribution (Regulation) Act, 2010, cannot use more than 20% of their foreign contributions towards meeting administrative expenses, according to amendments proposed to FCRA by the home ministry. The definition of public servant would be as per Section 21 of the Indian Penal Code.

As per the amendments, Section 7 is to be revised to prohibit any transfer of foreign contribution to any association or person.

Govt stands on the Bill

Minister of State for Home Nityanand Rai said that Foreign Contribution (Regulation) Amendment Bill, 2020 will stop the “misuse of the money” and rejected criticism by some opposition members that it targets minorities and has a few unnecessary provisions.

“When the government brought FCRA Bill in 2010, we were in opposition but we supported it. This amendment is not against NGOs and is not an attack on any religion. It will not stop foreign contribution. FCRA is a national and internal security law. This amendment is essential for Atmanirbhar Bharat”, he said.

Rai asserted the bill will help in curbing misuse of foreign funds and was necessary for an Aatmanirbhar Bharat (self-reliant India).

Opposition to the Bill

Congress MP Anto Antony said an attempt was being made to “suffocate the NGOs” through this bill. Stating that the amendments to the bill was “ill-conceived”, he made a plea to the government to not be in a hurry with the legislation.

Sougata Roy of the Trinamool Congress said there was “no need” for the bill, stressing that when the Supreme Court has said Aadhaar is not compulsory then why is the government making it mandatory for registration of NGOs.

Inflow of foreign contributions

The annual inflow of foreign contribution has almost doubled between 2010 and 2019 but many NGOs/associations have not utilised the funds for the declared purpose, as per the statement of objects and reasons for the bill.

Many were found wanting in ensuring basic statutory compliances such as submission of annual returns. As a result, the home ministry had to cancel the FCRA certificates of over 19,000 organisations between 2011 and 2019.

Criminal investigation also had to be ordered against dozens of NGOs which indulged in outright misappropriation or misutilisation of foreign contribution.

Over Rs 58,000 crore foreign funds were received by NGOs registered under the FCRA between 2016-17 and 2018-19.

There are around 22,400 NGOs in the country.

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