Amid concerns of the government's tight leash on NGOs receiving foreign donations hampering COVID-19 relief operations, the Union Home ministry on Wednesday said changes have been made to the Foreign Contribution Regulation Act, 2010 (FCRA) to ensure better transparency and compliance.
The Foreign (Regulation) Amendment Act, 2020 has done away with the provision to transfer foreign contribution from one NGO or person to another NGO or individual to avoid cases of foreign aid being misused. The Home ministry has said that any person or NGO willing to do philanthropic work for social gains should apply for registration or prior permission to the MHA through the online portal, to be able to receive and utilise foreign contribution.
Presently, there are 22,691 persons and NGOs who have been given certificates of registration or prior permission of central government to receive foreign contribution including relief supplies. A case-by-case examination is being done by the FCRA division in the MHA to ensure there is no personal use of such funds or unlawful entries on its online platform before the ministry gives its nod.
Concerns have also been raised whether the government has taken steps to address the conflict between the new tax exemptions on COVID-19 relief imports and the stringent FCRA regime. Responding to a question in the Rajya Sabha, Minister of state for home Nityanand Rai said that matters related to tax exemption are not part of the FCRA regime. The new tax exemptions require states to certify all receiving entities; on the other hand, FCRA requires approval from the ministry of home affairs for all such entities receiving foreign donations.
The MHA has of late taken a series of measures to regulate the flow of foreign funds under the FCRA regime raising concerns in the social sector where several NGOs have asked for relaxation in the rules to access funds. The FCRA is a legislation that focusses on proper receipt of foreign contribution from a foreign source and its utilisation by the recipient Indian entity.