FCRA LICENCE

1. Context 

2. Key points

• This came five months after the Income Tax Department conducted "surveys" on the premises of the CPR, Oxfam India and the Independent and Public Spirited Media Foundation (IPSMF), which funds a range of digital media entities.
• The licence was suspended following prima facie inputs regarding the violation of funding norms.

3. About CPR

• CPR is recognised as a not-for-profit society by the government of India and contributions to the Centre are tax-exempt.
• CPR receives grants from the Indian Council for Social Science Research (ICSSR) and is a Department of Science and Technology (DST) recognised institution.
• CPR receives grants from a variety of domestic and international sources, including foundations, corporate philanthropy, governments and multilateral agencies.

Image Source: Telugu bharath.com

4. About FCRA

• The FCRA was enacted during the Emergency in 1976 amid apprehensions that foreign powers were interfering in India's affairs by pumping money into the country through independent organisations.
• These concerns were expressed in Parliament as early as 1969.
• The law sought to regulate foreign donations to individuals and associations so that they functioned "in a manner consistent with the values of a sovereign democratic republic".

• The law was amended again by the current government in 2020, giving the government tighter control and scrutiny over the receipt and utilisation of foreign funds by NGOs.

1.  Registered under the Act
2. To open a bank account for the receipt of foreign funds in the State Bank of India, Delhi and 
3. To utilise those funds only for the purpose for which they have been received and as stipulated in the Act.

• They are also required to file annual returns and they must not transfer the funds to another NGO.
• The Act prohibits the receipt of foreign funds by candidates for elections, journalists or newspaper and media broadcast companies, judges and government servants, members of the legislature and political parties or their office-bearers and organisations of a political nature.

4.1. Amendments to the Act

• In July 2022, the MHA effected changes to FCRA rules through two gazette notifications and increased the number of compoundable offences under the Act from 7 to 12.
• The other key changes were the exemption from intimation to the government for contributions less than Rs 10 lakh the earlier limit was Rs 1 lakh received from relatives abroad and an increase in the time limit for intimation of the opening of bank accounts.
• Under the new rules, political parties, legislature members, election candidates, judges, government servants, journalists and media houses among others all barred from receiving foreign contributions will no longer be prosecuted if they receive foreign contributions from relatives abroad and fail to intimate the government within 90 days.
• However, the recipient will be required to pay 5 per cent of the foreign contribution received.

4.2. FCRA registration

• NGOs that want to receive foreign funds must apply online in a prescribed format with the required documentation.
• FCRA registrations are granted to individuals or associations that have definite cultural, economic, educational, religious and social programmes.
• Following the application by the NGO, the MHA makes inquiries through the Intelligence Bureau into the antecedents of the applicant and accordingly processes the application.

1. The applicant should also not have been prosecuted for or convicted of creating communal tension or disharmony;
2. Should not have been found guilty of diversion or misutilisation of funds and
3. should not be engaged or likely to be engaged in the propagation of sedition.

• The MHA is required to approve or reject the application within 90 days.
• In case of failure to process the application in the given time, the MHA is expected to inform the NGO of the reasons for the same.

4.3. Duration of the approval

• Once granted, FCRA registration is valid for five years. NGOs are expected to apply for renewal within six months of the date of expiry of registration.
• In case of failure to apply for renewal, the registration is deemed to have expired and the NGO is no longer entitled to receive foreign funds or utilise its existing funds without permission from the ministry.
• NGOs failing to apply before the due date can petition the ministry with cogent reasons within four months of the expiry of the registration, following which their applications can be reconsidered.
• Many NGOs do not apply for renewal for a variety of reasons, which include either the completion of the project for which the FCRA registration had been taken or the NGO itself folding up.

4.4. Cancellation of FCRA registration 

1. Registration can be cancelled if an inquiry finds a false statement in the application; 
2. If the NGO is found to have violated any of the terms and conditions of the certificate or renewal
3. If it has not been engaged in any reasonable activity in its the chosen field for the benefit of society for two consecutive years 
4. Or if it has become defunct.

• It can also be cancelled if "in the opinion of the Central Government, the Public interest must cancel the certificate".
• Registrations are also cancelled when an audit finds irregularities in the finances of an NGO in terms of the misutilisation of foreign funds.
• According to FCRA, no order of cancellation of the certificate can be made unless the person or NGO concerned had been given a reasonable opportunity of being heard.
• Once the registration of an NGO is cancelled, it is not eligible for re-registration for three years.
• The ministry also has the power to suspend an NGO's registration for 180 days pending inquiry and can freeze its funds.
• All orders of the government can be challenged in the High Court.

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