Centre Amends FCRA Rules for NGOs Seeking Foreign Funds

The Ministry of Home Affairs has amended the Foreign Contribution Regulation Rules (FCRR), changing the registration requirements for non-profit organisations seeking foreign contributions under the Foreign Contribution Regulation Act (FCRA). 

Purpose-Based Registration Framework 

Under the revised rules, NGOs must select their objectives from a pre-defined list of approved purposes and declare the states or Union Territories where they plan to operate. 

The approved list includes activities such as construction of places of worship, religious education, preservation of religious philosophy, and inter-faith dialogue and peace initiatives. However, religious conversions are explicitly excluded. 

Existing FCRA-registered organisations have been given one year to submit details of their purpose and operating locations. 

New Eligibility Conditions 

The government has introduced a minimum utilisation requirement, mandating that organisations must have spent at least ₹10 lakh of foreign contribution on their chosen activities during the previous two financial years. 

A fee of ₹300 will also be charged for every additional state of operation. 

Key Functionary Rules Revised 

Organisations with foreign citizens as key functionaries will ordinarily not be considered for registration. This restriction does not apply to persons of Indian origin, while the Union Government may permit foreign citizens in specified cases. 

The definition of a key functionary has been expanded to include company directors, firm partners, trustees, and the karta or head of a Hindu Undivided Family. 

Earlier Amendment and Sector Data 

Earlier this year, the Centre amended the FCRA to allow a government-appointed designated authority to take provisional control of an NGO's foreign funds and assets if its registration lapses.  

If registration is not restored, the authority may permanently manage, transfer or dispose of those assets for public purposes. 

Government data shows that more than 6,600 NGOs lost FCRA licences between FY17 and FY22. In 2023, Parliament was informed that 13,520 registered non-profit organisations received ₹55,741 crore in foreign contributions between FY20 and FY22. 

Read More: India’s Asset-Backed Securities Issuance Hits Record ₹1.53 Trillion as Foreign Banks Increase Purchases! 

Conclusion 

The amendments introduce revised requirements covering approved activities, operating regions, spending thresholds, key functionaries and compliance disclosures for organisations receiving foreign funds.   

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