FCRA Act: Major relief for NGOs in India as Centre eases penalties; read key changes

By: |
New Delhi | Updated: June 7, 2018 7:48:25 AM

FCRA Act: In a relief for Non-governmental organizations (NGOs) in India, the central government has relaxed the penalties if found violating norms under Foreign Contribution (Regulation) Act (FCRA).

FCRA ACTFrom now on, instead of suspension or cancellation of licences, hefty fines will be levied on NGOs under aforementioned ACT

FCRA Act: In a relief for Non-governmental organizations (NGOs) in India, the central government has relaxed the penalties if found violating norms under Foreign Contribution (Regulation) Act (FCRA). The Home Ministry order came after the Centre had cancelled or ceased to exist the licences of 18,000 NGOs for alleged violations of the FCRA. From now on, instead of suspension or cancellation of licences, hefty fines will be levied on NGOs under aforementioned ACT, according to an Indian Express report. The new rules will not be applicable retrospectively, as per the Home Ministry.

The stringent FCRA Act was in news after famous NGOs like Greenpeace, Ford Foundation and Compassion International and social activist Teesta Setalvad and senior lawyer Indira Jaising came under scanner. Before this recent order, probe was launched against NGOs for receiving foreign donations in one account and utilising funds from another account, spending it on purposes other than for what it was received, or not disclosing the manner in which funds were utilised. They were also charged for the same, as per officials.

What is the Home Ministry order?

The Ministry of Home Affairs (MHA) order dated June 5, said that “for offence punishable under Section 37 for transferring any foreign contribution to any other person in contravention of Section 7 of the Act, a penalty of Rs 1 lakh or 10 per cent of such transferred foreign contribution, whichever is higher,” will have to be paid. Similarly, for offences punishable under “Section 37 read with Section 17 of the Act for receiving foreign contributions in any account other than specified account, a fine of Rs 1 lakh or 5 per cent of the foreign contribution received in such account, whichever is higher can be paid as penalty.” “In case more than one offence has been committed by a person, the total amount of compounding for such offences shall not be more than the value of the foreign contribution involved,” the MHA said in its statement.

Impact of the change

The latest Home Ministry guidelines said, “the receiving and depositing of any fund other than foreign contribution account or accounts opened for receiving foreign contributions or for utilising the foreign contribution will attract a penalty of Rs 1 lakh or 2 per cent of such deposit, whichever is higher.”

Foreign funding decreased

After the Centre’s crackdown, foreign funding of NGOs in the past four years witnessed a significant decline. “NGOs received Rs 6,499 crore in 2016-17, as compared to Rs 17,773 crore in 2015-16. The amount received during 2014-15 was Rs 15,299 crore,” said an MHA’s statement to Parliament. In 2015, the CBI in its report to the Supreme Court had said that “less than 10 per cent out of the 29 lakh registered NGOs across the country file their annual income and expenditure statements.”

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1Farmer bodies aim to influence policy decisions
2Delhi Metro: CISF restored lost bag with Rs 50,000
3CBI books National Defence Academy Principal, 4 teachers for fudging academic records