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

Economy, Economy: Miscellaneous & Outdated articles28 Comments

LaxmikanthEthics
  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.





So far 28 Comments posted

  1. Mohammed Yunus

    Hai mrunal
    Can u plz explain clearly what is DTC,GST,GAAR. It’s uses it’s pros cons
    And d impact of this on Indian economy
    Thank you
    Regards

    1. Sachin Kumar Agrawal

      Dear Mohammed Yunus,

      DTC is Direct Tax Code. It is a step taken by the Government to consolidate all the direct taxes in the country. That is all the direct taxes will be summed up in a single code i.e. DTC

      GST – Goods and Services Tax. Just like DTC it is effort by the government to consolidate all the indirect taxes in the country. This will reduce the complexity involved in the different types of taxes are presently being implemented. It will replace all the indirect taxes in the country.

      GAAR is Genenal Anti Avoidance Rule

  2. ashish

    respected sir i just started prep for civil services and ur site gives good knowledge for us thank .as i m working in govt sec my office is from 7 – 2 and sat sunday off . so plz sir can u give me some guide line for preparing for IAS exam . thank u sir

  3. Neha

    Hi Mrunal,

    As you said in the first section FCRA regulates foreign contribution given to NGO, public servants, judges etc……but other the other hand you mentioned that public servants, judges can’t accept foreign contribution.

    I am a bit confused with this?

    Please elaborate this.

    Thanks & Regards,
    Neha

    1. Shubham

      The foreign contribution in elections ,to judges or to public servants may have adverse effect in our policy implementation and governance . To avoid this, FCRA puts restriction that judges or public servants
      should not receive foreign contri. and only NGOs and other orgs should get it with approval from Home Ministry. So whatever mentioned is right.

      1. chenab khanna

        hii partho…..

        nowadays mrunal seems lil bit busy so i am asking this question to u…..

        my problem is that i dont how to tackle revision of stuff tht i hv already gone thru???

        should on a daily basis i must revise something …or i should keep certain days aside in a week for revision….plz help???? suppose if i begin with any new book then shud i read in a single go 1st and then learn whtevr i had highlighted and then revise it……..or it shud be done chapterwise or learn things as it comes while reading tht stuff……….

        thnx in advance……..

  4. Ankur

    u have mentioned tht newspaper walla are not allowed??? so electronic media is out of its purview or electronic media without print mode is not present at all???
    and is IIT not a central university???

  5. Shivam B

    @ Sajal
    Kudankulam Nuclear Power Plant is in Tamil Nadu.

    For question number 1 all the options are incorrect.

    1- Ministry of Home affairs (FOREIGNERS DIVISION, FCRA Wing) is responsible for implementing FCRA.
    2- Kudankulam Nuclear Power Plant is in Tamil Nadu.
    3- A Lok Sabha election candidate can not accept foreign donations for campaign after taking necessary approval from Chief Election Commissioner.

  6. Shankar Shinde

    THe foreign Grant sanctioned to Maharashtra Univercity of Health Sciences . What is the correct procedure to accept the sanctioned foreign Grant ?

  7. Ravindra J

    Sir,
    Can a mnc pharmaceutical company sponsor government doctor (public servant) to attend any medical related conferences abroad? It includes free air travel, accomodation, etc. does the doctor need to take permission from central govt? Does the doctor in his application inform that the source of funds is an mnc? Will that be fine or the source of funds had to be fcra certified association

  8. Rutuja

    Foreigners have given their contribution to Indian Co. to give it to a trust in India. That Indian Company has given that amount to trust on behalf of Foreigners in rupees.
    Hence my query is that whether that donation is foreign income for the trust or domestic income?

  9. sheshachala

    dear sir we are having one ngo and we had been contacted by one agency from delhi for generating funds for our ngo but we dont know them and till now we are contributing from our pocket for social programs can we accept the proposal kindly let me know sir

  10. suman

    Dear Sir, my question is that in my case foreigners are depositing money ($35 – $90) to us for taking part in our photographic competition. now do we come under the purview of this act? should we make an association or public charitable trust or section 25 company ?

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