Concerns about FCRA

Should Foreign Contributions (Regulation) Act be repealed?

The original Foreign Contributions Regulation Act (FCRA) was passed in the year 1976, during the regime of Prime Minister Indira Gandhi. It prohibited electoral candidates, Political Parties, M.Ps, Judges and cartoonists to accept foreign funding. The justification of this act was that there should be a restriction of ‘foreign interference’ in domestic politics.

The era of liberalization

In the year 1991, the economy was opened up. Even monetary help could be taken from the World Bank, the IMF, etc. It was the era of liberalization and globalization. In the year 2010, amendment to the original FCRA was done. The new FCRA 2010 regulated the acceptance and the utilization of foreign contributions by individuals or associations. It also prohibited the acceptance and utilization of foreign contributions by organizations which were ‘of political nature’ and conducted activities detrimental to the National Interest.

FCRA 2010

With the new FCRA in place, the registration of any organization under FCRA has to be renewed every 5years, otherwise it gets automatically suspended. Moreover, only 50% of the foreign funds can be used for administrative purposes. Recently the Ministry of Home affairs have cancelled licenses of many NGOs and other Civil Society Organizations under FCRA 2010.

Reasonable Restrictions

The whole issue is that the reasonable restrictions put in the name of ‘national interest’ on these organizations should be precise and well defined. Such vague terms allow the state to exercise its discretionary power on these Civil Society Organizations (CSOs). The article 20 of the Universal Declaration of Human Rights speaks about the right to freedom of associations. Clearly, violation of this right is a human rights violation.

Should the FCRA be repealed?

A strong monitoring and regulation of NGOs and CSOs is definitely needed. Quite often it is seen that, these organizations turn into a money laundering business and may also have links with organized crimes and terrorism. Licenses should not only be cancelled due to political dissent. It is because India is a democracy and the opinion of every section must be considered. Rather, wider aspects like a real threat to the integrity and the sovereignty of the nation should be seen.
A self regulatory independent agency should be formed to monitor the activities of the CSOs. In 2009, a 7member taskforce was set up to create a National Accreditation Council of India (NACI) for this purpose which has not yet been formed. It therefore becomes important today to bring an NACI in place instead of repealing FCRA or making it so aggressive.


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