FCRA curbs to discourage NGOs from spending on posh buildings, luxurious vehicles: MHA report

The Foreign Contribution (Regulation) Act was amended in 2020 to discourage expenditure by non- government organisations (NGOs) on “unproductive items” such as “inflated staff salaries, posh buildings and office and luxurious vehicles,” the Ministry of Home Affairs has said in its 2021-22 annual report.

Under the FCRA, 2010, any person or association seeking foreign contributions for definite cultural, economic, educational, religious or social programme may either obtain a registration or prior permission to receive foreign contribution from the Ministry of Home Affairs by making an application in the prescribed format.

Last month, MHA cancelled the FCRA licence of the Rajiv Gandhi Foundation (RGF) and Rajiv Gandhi Charitable Trust (RGCT), organisations associated with the Gandhi family, for alleged violations of the law.

The licence granted to nearly 6,000 such organisations lapsed on 1 January this year, The Hindu newspaper reported.

It quoted an unnamed official who said the government had cancelled the renewal for 179 organisations over alleged violations, while the remaining – around 5,700 – did not apply for a renewal before the deadline, 31 December.

Before 1 January 2022, 22,762 NGOs were registered under the FCRA. But it now come drastically down.

The registration is granted only to such associations which have a proven track record of functioning in the chosen field of activity during last three years.

The Ministry said that the Foreign Contribution (Regulation) Amendment Act, 2020 was passed by Parliament in September 2020 and was notified on September 28 same year.

“The amendments made in the Act would help effectively monitor the receipt and utilisation of foreign contribution,” it said.