Centre extends validity of FCRA registration certificates till June.
What is the news :
- The Centre has decided to extend the validity of Foreign Contribution (Regulation) Act, FCRA registration certificates of certain categories of FCRA registered entities.
- The validity of registration certificates of such entities whose validity was extended till 31st March 31st of this month and whose renewal application is pending will stand extended till this year or till the date of disposal of the renewal application, whichever is earlier.
- According to ministry, validity of FCRA entities whose 5 years validity period is expiring during 1st April 2022 to 30th June 2022 and who have applied for renewal before expiry of 5 years validity period will stand extended up to 30th June 2022 or till date of disposal of renewal application, whichever earlier.
- The order also mentioned that all FCRA registered associations are therefore advised to take note that in case of refusal of the application for renewal of certificate of registration, the validity of the certificate shall be deemed to have expired on the date of refusal of the application of renewal and the association shall not be eligible either to receive the foreign contribution or utilise the foreign contribution ‘ received.
- This issues with the approval of the Competent Authority. All concerned may take note of the decision and take appropriate action in the matter.
About FCRA act :
- The Foreign Contribution (regulation) Act, 2010is an act of the Parliament of India, by the 42nd Act of 2010.
- It is a consolidating act whose scope is to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected therewith or incidental thereto.
- It is designed to correct shortfalls in the predecessor act of 1976. The bill received presidential assent on 26 September 2010.
What is the prime objective of Act :
- Prime objective of regulating the acceptance and utilization of foreign contribution and foreign hospitality by personsand associations working in the important areas of national life.
What is foreign contribution?
As defined in Section 2(1)(h) of FCRA, 2010, “foreign contribution” means the donation, delivery or transfer made by any foreign source ─
- of any article, not being an article given to a person as a gift for his personal use, if the market value, in India, of such article, on the date of such gift is not more than such sum as may be specified from time to time by the Central Government by rules made by it in this behalf;
- of any currency, whether Indian or foreign;
- of any security as defined in clause (h) of section 2 of the securities Contracts(Regulation) Act, 1956 and includes any foreign security as defined in clause (o) of Section 2 of the Foreign Exchange Management Act, 1999.
Important points :
- The law provides the framework under which organisations in India can receive and utilise grants from foreign sources.
- Under the Act, a registered person must accept foreign contributions only in a single branch of a scheduled bank specified by them. However, they may open more accounts in other banks for utilisation of the contribution.
- The Bill amends this to state that foreign contribution must be received only in an account designated by the bank as “FCRA account” in such a branch of the State Bank of India, New Delhi, as notified by the central government.
- No funds other than the foreign contribution should be received or deposited in this account. The person may open another FCRA account in any scheduled bank of their choice for keeping or utilising the received contribution.
- Under the Act, if a person accepting foreign contribution is found guilty of violating any provisions of the Act or the Foreign Contribution (Regulation) Act, 1976, the unutilised or unreceived foreign contribution may be utilised or received, only with the prior approval of the central government.
- The Bill adds that the government may also restrict usage of unutilised foreign contribution for persons who have been granted prior permission to receive such contribution.
- This may be done if, based on a summary inquiry, and pending any further inquiry, the government believes that such person has contravened provisions of the Act.
- The Act also made Aadhaar a mandatory identification document for all the office bearers, directors and other key functionaries of an NGO and capped the administrative expenses at 20% of the foreign funds received, earlier the upper limit was 50%.
- The amendment also barred sub-granting by NGOs to smaller NGOs who work at the grassroots. Election candidates, government servants, members of any legislature and political parties were prohibited from accepting foreign funding.
Recent Amendment : (important)
- The Minister of Home Affairs, Amit Shah introduced the Foreign Contribution (Regulation) Amendment Bill, 2020, which made several changes to the existing Act, including making it mandatory for office bearers of any non-governmental organisation (NGO) to provide their Aadhaar numbers.
- It also gives the government the power to hold a “summary enquiry” to prevent an organization from using foreign funds.
- These changes were intended to increase transparency regarding the use of foreign money for non-governmental organisations.
- The Bill was unanimously passed by the Lok Sabha on 21 September 2020.
- The Rajya Sabha unanimously passed the bill on 23 September 2020.
Who can receive foreign contribution?
- A ‘person’, as defined in Section 2(1)(m) with the exclusion of those mentioned in Section 3 of FCRA, 2010, having a definite cultural, economic, educational, religious or social programme can receive foreign contribution after it obtains the prior permission of the Central Government, or gets itself registered with the Central Government. Illustrative but not exhaustive lists of activities which are permissible and may be carried out by associations of different nature.
Who cannot receive foreign contribution?
As defined in Section 3(1) of FCRA, 2010, foreign contribution cannot be accepted by any:
- a candidate for election.
- correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper.
- Judge, government servant or employee of any Corporation or any other body controlled on owned by the Government.
- member of any legislature.
- political party or office bearer thereof.
- organization of a political nature as may be specified under sub- section (1) of Section 5 by the Central Government.
- association or company engaged in the production or broadcast of audio news or audio visual news or current affairs programmes through any electronic mode, or any other electronic form as defined in clause (r) of sub-section (i) of Section 2 of the Information Technology Act, 2000 or any other mode of mass communication
- correspondent or columnist, cartoonist, editor, owner of the association or company referred to in clause.
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