The Union Ministry of Home Affairs, under Amit Shah, have notified a number of amendments in the Foreign Contribution (Regulation) Act, tightening the noose around vague operations by non-governmental organisations (NGOs). The FCRA amendments have long been proposed as the Government sought to prevent the misuse of foreign funding. The new norms seeks greater accountability from the NGOs on their foreign funding and use of the mone in India. The new rules also demand that NGOs furnish the purpose of their registration and disclose their donors.
“Every application for registration shall mention the purpose or purposes for which registration is sought, chosen only from such list of purposes as specified in the Schedule appended to these rules; and the states or Union territories in which the association proposes to undertake the activities,” reads a Gazette notification issued by the Ministry of Home Affairs on June 23.
What are the new rules?
These amendments aim to enhance transparency, ensure the active utilisation of funds, and refine the eligibility criteria for foreign contributions. Under the new framework, associations are now required to align their operations with a predefined schedule of purposes, disclose ultimate donors, and adhere to stricter financial and reporting mandates.
Definition of Key Functionaries: The definition has been broadened to include company directors, partners, trustees, the ‘Karta’ of a Hindu Undivided Family, and any individual exercising management control.
Restriction on Foreign Nationals: Associations with foreign nationals (excluding those of Indian origin) as key functionaries will generally not be eligible for registration or prior permission, though the government retains the power to grant exceptions via official orders.
Predefined Activity Schedule: Applicants must now select their area of operation and specific purposes from a “Schedule” covering religious, cultural, economic, educational, and social categories.
Proselytisation Clause: While various religious activities (such as construction of religious places or conducting satsangs) are permitted, the rules explicitly exclude ‘proselytisation’ from categories like religious education, documentation of faith traditions, and preservation of indigenous beliefs.
Operational Spending Requirements: To prevent inactive NGOs from holding licenses, a minimum spending limit of Rs 10 lakh of foreign contribution over the last two financial years has been introduced.
Fund Utilisation & Monitoring: For NGOs under “Prior Permission,” subsequent fund installments will only be released after at least 75% of the previous installment has been utilized, subject to government field inquiry verification.
Social Media: Applications must now include details of the organisation’s social media accounts.
Ultimate Donor Disclosure: NGOs must disclose the original source of funds if contributions arrive via intermediary remittance vehicles or Donor Advised Funds.
Detailed Reporting: Annual returns must now be accompanied by a “detailed activity report” in addition to standard financial statements.
Compliance Timeline and Fees: Existing associations registered before 2026 have one year to disclose their specific purposes and states of operation to the government. Additionally, a fee of Rs 300 will be charged for every extra state or purpose added to an application.
