The Foreign Contribution (Regulation) Act (FCRA) in India regulates the acceptance and utilisation of foreign contributions by individuals, associations, and organisations.
It was passed after the emergency era, to ensure that foreign players via international donations, do not fund illegal or antisocial activities in India.
The act requires that any organisation or individual seeking to receive foreign funding must obtain an FCRA licence from the Ministry of Home Affairs.
The licence is mandatory for not-for-profit enterprises, NGOs, voluntary organisations, societies, trusts, etc.
Registration under the Societies Registration Act, 1860, or as a trust or a Section 8 company under the Companies Act, 2013
Must be in existence for at least three years
Should have spent over ?15 lacs during the last three years on activities for which the registration is being taken
Open a bank account for receipt of the foreign funds in the State Bank of India, Delhi
Utilising those funds strictly for the purpose for which they have been received
There are other restrictions, such as disallowance on transferring the funds to another NGO, filing annual returns, limit on administrative expenses for the funds, etc.
Once an application is filed, the Ministry of Home Affairs makes an inquiry into the veracity of claims made by the applicant, including an investigation by the Intelligence Bureau.
The applicant should be a bona fide, real person (and not be fictitious or benami)
The applicant must never have been prosecuted, or convicted for indulging in activities aimed at religious conversion, communal disharmony, guilty of diversion of funds or be engaged in sedition.
The Ministry of Home Affairs accepts or rejects the application within 90 days.
In case the application is rejected, the Ministry provides reasons for the rejection.
Once the registration for FCRA is received, it is valid for a period of five years.
An application for renewal can be filed within six months of date of expiry.
Use by candidates for election
Journalists
Newspaper, media and broadcasting companies
Judges
Government servants
Members of legislature
Political parties, and their office bearers
Political organisations
Non-compliance with the provisions of the FCRA or any other law in India
Acceptance of foreign contributions without obtaining prior approval from the Ministry of Home Affairs, such as after expiry of the FCRA registration
Failure to apply for renewal of FCRA registration within four months of expiry
Utilisation of foreign contributions for purposes other than those for which they were received
Failure to submit the required annual reports or audited statements to the government
Involvement in activities that are detrimental to the national interest or security of India
The organisation itself becoming defunct or inoperational for a considerable period of time
Determine the reason for revocation: Before applying for renewal of the FCRA licence, it is essential to determine the reason for revocation. This will help in addressing the issue effectively and prevent a recurrence.
Rectify the violations: After determining the reason for revocation, the organisation or individual must take corrective measures to rectify the violations that led to revocation. This may involve submitting the required reports, repaying the amount of foreign contribution received in violation of the law, or addressing any other issues that led to the revocation.
Submit the renewal application: Once the violations have been rectified, the organisation or individual must submit the renewal application to the Ministry of Home Affairs. The application must be accompanied by all the required documents, including audited financial statements, annual reports, and other relevant information.
Paying the renewal fee: Along with the renewal application, the organization or individual must also pay the renewal fee as prescribed by the Ministry of Home Affairs.
Await decision: After submitting the renewal application, the organization or individual must wait for the decision of the Ministry of Home Affairs. The Ministry may conduct an inspection or inquiry before deciding on the renewal of the FCRA licence.
Challenging the decision: An order containing the rejection of renewal of FCRA Registration can be challenged in the High Court.