[Economy] Foreign Contribution Regulation Act (FCRA): Meaning, Features, Controversies

Economy, miscellaneous

  1. What is FCRA?
  2. What is the need of FCRA Act?
  3. Who can accept Foreign Contribution?
  4. Who cannot accept Foreign Contribution?
  5. Why is FCRN Act in news?
  6. Controversy
  7. Mock Questions

What is FCRA?

  • Foreign Contribution Regulation Act (FCRA)
  • It regulates the foreign contribution (money donation) and foreign hospitality (e.g. free airplane tickets and hotel lodging during videsh-yaatra) given to various NGOs, institutes, judges, journalists, public servants etc.

What is the need of FCRA Act?

  • To check that foreigners are not affecting India’s electoral politics, public servants, judges, journalists, NGOs etc. for wrong purposes.
  • If someone violates the FCRA act, he can be sent to jail for up to 5 years.

Who can accept Foreign Contribution?

  • Organizations working for definite cultural, social, economic, educational or religious programs.
  • But first, they’ve get permission from the Ministry of Home Affairs AND
  • Second, they have to maintain separate account book listing the donation received from foreigners and get it audited by a Chartered Accountant and submit it to Home Ministry every year.

Who cannot accept Foreign Contribution?

  1. Election candidate.
  2. MP and MLAs.
  3. Newspaper-walla: Correspondent, columnist, cartoonist, editor, owner, printer or publishers of a registered Newspaper.
  4. Public Servents: Judge, government servant or employee of any Corporation or any other body controlled on owned by the Government.

Why is FCRN Act in news?

  • Earlier Mohan said that “US based NGOs are financing the protests @KundanKullam Nuke Power Plant.”
  • So Home ministry got in action, bank accounts of some NGOs were frozen after it was found that they were diverting money received from their donors abroad into funding protests at the Koodankulam plant.
  • Now, Home ministry has cancelled some more registrations including top 8 national educational institutions such as -Jawaharlal Nehru University, IIT-Kanpur and Jamia Milia Islamia saying that these institutes are not maintaining proper FCRA accounts.
  • so, Unless their registrations are restored, these institutions cannot receive contributions from abroad.

Controversy

  • The Home Ministry had earlier made a notification that if xyz organization’s accounts are audited by CAG then it doesnot need to maintain FCRA accounts.
  • Jamia Milia,  JNU etc. = Central Universities = hence audited by CAG = They don’t need to maintain FCRA accounts in the first place.

Mock Questions

Q1. Which of the following statements are correct?

  1. Finance Ministry is responsible for implementing Foreign Contribution Regulation Act (FCRA)
  2. Kundankullam Power plant is located in Andhra Pradesh.
  3. A Lok Sabha election candidate can accept foreign donations for campaign after taking necessary approval from Chief Election Commissioner.

Q2. Write a note on the Salient Features of Foreign Contribution Regulation Act (FCRA). 12 marks.