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Licenses of 6676 NGOs cancelled for FCRA violation

FCRA violation

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FCRA violation
FCRA violation

In News: FCRA violation

  • The government has recently cancelled the foreign funding license of 6,676 NGOs and associations over the past three years for violation of various provisions of Foreign Contributions (Regulation) Act.
  • Other data regarding NGOs is as follows:
    1. Scrapped NGOs: Between 2017 and 2019, total 6,676 FCRA licenses of organizations has been scrapped. Out of which 900 were registered under religious category, 2,531 under cultural category and 4,614 under educational category.
    2. New NGOs registered: Also 2,214 NGOs were granted license under FCRA between 2017 and 2019 in the religious, cultural and educational categories.
    3. Registration Cancelled: The registration of 4,866 NGOs was cancelled across all categories in 2017, that of 1 NGO in 2018 and of 1,809 NGOs in 2019.

NGOs in India:

  • NGOs play an important role in the upliftment of the weaker sections of the society and their overall development.
  • This is especially true in the case of India, where a vast majority of its population continues to remain under the poverty line and have little or no access to even basic facilities provided by the government.
  • NGOs Funding: Being non-profit organizations, operations of NGOs are entirely reliant on donations, both domestic and foreign.

About: Foreign Contributions

  1. Foreign Contribution:
    • Foreign contribution include currency, article other than gift for personal use (not exceeding the value of INR 25,000) and securities received from foreign source.
  2. Foreign Hospitality:
    • Any offer from a foreign source to provide foreign travel, boarding, lodging, transportation or medical treatment cost.
  3. Foreign source includes:
    • Foreign citizens
    • Foreign companies, corporations and MNCs
    • Foreign government and their agencies
    • International agencies other than specified and government notified agencies
    • Foreign trusts, foundations, trade unions, societies, clubs or any other associations of individuals formed outside India

About: Foreign Contribution (Regulation) Act, 2010:

  • The FCRA governs the grant of foreign donations to the NGOs and all such voluntary organizations are required to get themselves registered under this law.
  • The Foreign Contribution (Regulation) Act, 2010 and rules framed under it (the “FCRA” or “Act”) regulate the receipt and usage of foreign contribution by NGOs in India.
  • Implementation of the act: The act is implemented by the Ministry of Home Affairs, Government of India.
  • Objective: The intent of the Act is to prevent use of foreign contribution or foreign hospitality for any activity detrimental to the national interest.
  • Scope of the Act: The act is applicable to a natural person, body corporate, all other types of Indian entities (whether incorporated or not) as well as NRIs and overseas branches/subsidiaries of Indian companies and other entities formed or registered in India.
  • Conditions for an NGO to be registered under the FCRA:
    1. As per the Foreign Contribution (Regulation) Act, 2010, registered NGOs can receive foreign contribution for five purposes – social, educational, religious, economic and cultural.
    2. NGO must be in existence for at least three years and must have undertaken reasonable activity in its field for which the foreign contribution is proposed to be utilized.
    3. NGO must have spent at least INR 1,000,000 over three years preceding the date of its application on its activities.
  • Validity of registration certificate: The registration certificate is valid for a period of five years and must be thereafter renewed in the prescribed manner.
  • Foreign funding for NGOs not registered under FCRA:
    1. NGOs not eligible for registration can seek prior approval from FCRA for receiving foreign funding.
    2. This permission is granted only for a specific amount of foreign funding from a specified foreign source for a specific purpose, which remains valid till receipt and full utilization of such amount.
NOTE: In both of the above cases, the applicant must file the application in a prescribed format with the Authority and submit all the documents as required under the Act.
 NOTE: Also, NGO must have a separate bank account exclusively for the deposit of foreign contribution. No other fund can be credited to this account.

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