Lok Sabha Passes Amendment to FCRA amid criticism by Opposition Parties & NGOs

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The Lok Sabha on Monday passed the Foreign Contribution (Regulation) Amendment (FCRA) Bill, 2020 with the bill now moving to Rajya Sabha. The bill introduced by Minister of State for Home Nityanand Rai, on behalf of Union Home Minister Amit Shah said the bill seeks to bring more transparency.  

The bill seeks to include “public servants” and “corporation owned or controlled by the government” among the list of entities who are not eligible for foreign donation, make Aadhaar registration compulsory, limit administrative expenses by Non-Governmental Organisations (NGO) through foreign expenses to 20% from 50% earlier.   

According to the government, the annual inflow of foreign contribution has almost doubled between 2010 and 2019, but many NGOs have either misused or misappropriated funds which have led to Central Government cancelling the registration of over 19,000 NGOs and initiating criminal investigation against dozens of NGOs. However, the opposition parties have questioned the government’s intent alleging it is part of a government attempt to target its critics. Congress leader of Lok Sabha, Adhir Ranjan Choudhary stated the bill will give power to the government to “muzzle the voices of dissent”.  

The FCRA enacted in 1976 seeks to regulate foreign donations ensuring they do not adversely affect the internal security of the nation. It is mandatory for all NGOs to register with FCRA. The act initially excluded legislature, political parties, judges, media persons from receiving any foreign donations, however with Finance Bill 2017, the act was amended to exclude political parties to receive funds from the Indian subsidiary of a foreign company or a foreign company in which an Indian holds 50% share.  

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