India’s non-profits are fuming as the government tightens the leash on foreign contributions

• The Foreign Contribution (Regulation) Bill will restrict the use of foreign funds in Indian not-for-profit organizations.
• The bill also makes the use of Aadhar compulsory for organizations receiving foreign funds.
• The move is being seen as a huge blow to India’s non-governmental organizations and not-for-profit organizations, who often operate with foreign funds/donations.

The Indian government has moved to amend the Foreign Contribution (Regulation) Bill, 2020, during the monsoon session of the parliament. The FCRA will restrict the use of foreign funds in Indian not for profit organizations.

On Monday, the lower house of the parliament passed the bill, which also makes the use of Aadhar compulsory for organizations receiving foreign funds.

What are the proposed changes under the FCRA?

The bill tabled by Minister of State of Home Nityanand Rai on behalf of Home Minister Amit Shah aims to restrict the use of foreign funds in charitable organizations. The amendment proposes:

• To include "public servants" in the prohibited category
• To reduce the administrative expenses through foreign funds by an organisation to 20% from the earlier 50%.
• Organisations can receive the foreign funds in a bank account designated as the ‘FCRA account’ only in a branch of the State Bank of India, New Delhi
• Organisations will now have to register for renewal of licenses every six months and can also be subject to government scrutiny then.
• To prohibit transfer of grants received under FCRA to any other organisation
• Seeks to make Aadhar mandatory for registrations

"FCRA is a national internal security law...This amendment is necessary for Atma Nirbhar Bharat. This bill is not to suppress anyone but to control those who try to suppress the people of the country. We only take action against any organisation under the rule when they do not follow the law,” said Rai.

NGOs voice their dissent over the amendments in FCRA bill

The move is being seen as a huge blow to India’s non-governmental organizations and not-for-profit organizations, who often operate with foreign funds/donations.

The CEO of Oxfam India, a major nonprofit group, took to Twitter to voice his dissent.


Another national association of Indian voluntary development organizations – Voluntary Action Network India (VANI), too released a statement opposing the bill. “The new FCRA Bill throttles the spirit of cooperation that had been ushered in earlier this year by the positive role played by development organizations in mitigating the lockdown and COVID-19 pandemic by virtually making it impossible for NGOs to function,” said VANI’s statement.

The organization also said that the bill “assumes that all NGOs receiving foreign grants are guilty, unless proved otherwise.”

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