Summary of this article
The bill proposes a “Designated Authority” with powers to take over, manage, or dispose of assets of NGOs whose licences are cancelled
Opposition leaders and minority groups warn the amendments could disproportionately affect minority-run institutions and restrict access to foreign assistance.
Provisions limiting judicial recourse, expanding executive discretion, and allowing asset transfers without standard safeguards have raised alarms
At a time when the Bharatiya Janata Party is attempting to woo Christians ahead of the Kerala elections, the union government has introduced the Foreign Contribution (Regulation) Amendment Bill, 2026 in the Lok Sabha. Several people point towards an attempt to take control of non-governmental organisations receiving foreign assistance.
The Amendment Bill introduced by Minister of State for Home Affairs Nityanand Rai on March 25, has ignited a political storm, with the NDA calling it as a necessary requirement to tackle conversions and anti-national activities and the Opposition warning of deeper implications for civil liberties.
Questioning the timing of the Bill, Kottayam MP Francis George noted that it was introduced in the Lok Sabha days before elections in five states, when MPs from regions such as Kerala, Tamil Nadu, Puducherry, Assam, and West Bengal were absent. “Bringing in such a law at this juncture suggests questionable intent,” he remarked, alleging the influence of Rashtriya Swayamsevak Sangh behind the move.
Through this amendment, the government aims to create a “Designated Authority”, a body empowered to take control of assets belonging to organisations that either lose or surrender their FCRA licence. The scope of this power is striking: under Section 16A(2), any asset created even partially with foreign contributions would be transferred in full to this authority once a licence is cancelled.
“The FCRA Bill raises many concerns, and we are questioning the real need for it. There are already adequate laws to deal with any misuse of FCRA provisions. Every FCRA account is closely monitored, so why introduce this?” said Archbishop Thomas Tharayil of Changanassery.
“We feel this may be an indirect attempt to take control of minority institutions. It is well-known that many such institutions have been built with support from abroad. Even the most famous of India’s leading educational and healthcare institutions have, at some point, depended on FCRA funds. Now, the government appears to have sweeping powers to suspend or revoke licences and even take ownership,” adds the Archbishop.
The legislation goes further. Section 14B introduces a mechanism, under which assets may ultimately pass permanently to the State if an organisation fails to secure a fresh registration within a stipulated timeframe. This means that even administrative delays in processing renewals could to used take over organisations.
Fr Mathew Koyickal, Deputy Secretary of the Catholic Bishops' Conference of India (CBCI), cautioned that the bill, introduced ostensibly as a measure to regulate licence renewals, could open the door to executive overreach into constitutionally protected freedoms, with minority communities likely to be particularly affected. He expressed concern that the proposed provisions may allow undue interference in the functioning of minority institutions as well as civil society organisations.
He pointed towards clauses that vest sweeping powers in the Central Government to refuse renewal or cancel licences. A greater concern, he noted, is the framework that would enable a newly created authority to take control of institutions, including their funds, properties and other assets. Such measures, the Conference argued, are unacceptable and raise serious questions about fairness, transparency and accountability.
Meanwhile, Section 16A(3)(b) allows the Designated Authority to assume control over an organisation’s operations if such intervention is deemed to serve the public interest.
Kottayam MP K. Francis George argued that the amendment’s provisions are designed to bring organisations firmly under Union government control, even allowing the Centre to take over their functioning. If licences are not renewed—or delayed—the government could step in to seize, sell, or transfer their assets, with sweeping powers resting in its hands.
“This will affect everyone, but minorities far more,” George said, warning that charitable institutions run by minority communities would be particularly vulnerable. He pointed out that even under the existing regime, many organisations have lost their FCRA licences and struggled to renew them, while fresh applications are rarely approved. “In such a situation, these amendments will make it nearly impossible for minority charities to receive any foreign assistance,” George added.
A proposed amendment to Section 43 mandates prior approval from the Central Government before any investigation can begin—an arrangement that, while presented as a safeguard, places considerable discretion in the hands of the political executive. Section 16E(2) reinforces this dynamic by requiring the Designated Authority to act in accordance with government “directions or orders”, formalising executive influence over what are effectively quasi-judicial functions.
Additional provisions have also drawn scrutiny. Under Section 16A(6), original office-bearers, or anyone acting on their behalf, are barred from reacquiring assets disposed of by the authority, even at fair market value. Critics suggest this could distort competitive bidding, potentially lowering asset values and favouring buyers with closer ties to the state.
Under Section 16K, the bill provides a relatively weak appeals mechanism. Challenges to orders issued by the Designated Authority can be made only before a District Judge within the local jurisdiction or a judicial officer not below the rank of a Civil Judge (Senior Division), subject to financial limits set by the Central Government. This raises concerns that disputes involving high-value assets could be deliberately kept away from higher courts through rule-making, thereby restricting access to more robust judicial oversight.
Section 16D introduces another significant shift. It states that a certificate of sale issued by the Designated Authority will serve as conclusive proof of ownership and can be used for registration even in the absence of original title deeds. This effectively overrides standard property transfer safeguards, increasing the risk of conflicting ownership claims and weakening protections for genuine buyers acting in good faith.
Further, Section 16D(3) limits the role of civil courts by providing that vested property cannot be transferred through attachment, seizure, or execution except as allowed under this Act. In doing so, it sidelines ordinary civil remedies and centralises dispute resolution within a system controlled by an executive-appointed authority.
The bill also broadens the scope of liability through an expansive definition of “key functionary” under Clause 3(f). This definition goes beyond directors or trustees to include any individual who exercises control over, or is responsible for, the organisation’s management or affairs—regardless of their formal title. As a result, personal criminal liability under Section 39 could extend to volunteers, consultants, or even informal advisers, potentially discouraging professionals from taking on such roles due to the risks involved.
In addition, Section 16C places responsibility on the last set of key functionaries to report if an organisation becomes inoperative or defunct, with failure to do so leading to automatic and permanent vesting of its assets. In such cases, all foreign contributions received by the organisation, along with any assets created from them, will be permanently vested in the Designated Authority.
Further, if the Authority sells any immovable property under its control, it will issue a certificate of sale to the buyer, which will serve as conclusive proof of ownership, even if the original title deeds are not provided. This imposes compliance obligations even after an organisation has effectively ceased to function, while also raising questions about how “defunct” is defined and who determines this status.
Operational concerns are compounded by the amendment to Section 13 in the Bill. During the suspension of an organisation’s licence, it is prohibited from transferring or dealing with its assets without prior approval from the Central Government. When read alongside the takeover powers granted under Section 16A(3)(b), this creates a situation where the state can freeze activities or assume control of operations based on preliminary allegations, potentially paralysing organisations before any final determination is made.
Section 16F states that any person whose foreign funds or related assets are taken over by the Designated Authority, along with their key officials, must fully cooperate with the Authority. This includes giving complete access to all accounts, records (including digital records), offices, and properties for inspection and valuation.
Notably, the bill leaves key roles loosely defined. Terms such as “Designated Authority” and “Administrator” are to be specified later through government notification, with no statutory criteria governing qualifications, independence, tenure, or accountability. Similarly, amendments to Section 48 hand the Central Government broad powers to frame procedural rules—covering everything from valuation methods to appeal thresholds—through executive notifications that bypass parliamentary oversight.
Koyickal warned that these provisions risk placing minority institutions under an excessively restrictive regulatory regime, thereby undermining democratic principles. He added that allowing the Centre to assume control over the foreign funds and assets of NGOs after the expiry of their FCRA registration would be undemocratic, unconstitutional, and contrary to the principles of natural justice.
He warned that organisations whose FCRA licences have already been cancelled now face the risk of complete takeover by the Union government. “This could cripple charitable work altogether,” he said, adding that groups working with the poorest sections of society may no longer be able to function. With such wide discretionary powers, he questioned the necessity of such a law in a democracy.
Fr Michael Pulickal of the Kerala Catholic Bishops’ Council’s Commission (KCBC) for Social Harmony and Vigilance said the government’s stated aim of curbing “anti-national activities” and “forceful conversions” appears to single out minorities.
“When such terms are used, it clearly feels targeted,” he noted, adding that anti-conversion laws are already under challenge in the Supreme Court. “This amendment strikes at our constitutional and minority rights. Like the anti-conversion laws, it risks becoming a tool against minorities.”
He emphasised that NGOs working with the poor play a vital role in nation-building through hospitals, schools, and orphanages that serve all communities. “There is no justification for this. It amounts to daylight robbery.”
Pulickal said, “You cannot target institutions based on religion. The government must treat all citizens equally, not view everything through a religious lens,” he said, calling the move divisive. He also pointed out that several organisations, particularly among minority communities, are already struggling to renew their FCRA licences, making the amendments even more concerning.
Archbishop Tharayil expressed apprehension that institutions which were built over years of service to the nation could be taken over without sufficient justification. “We are deeply worried. These were created for the country’s development, yet such contributions seem to be despised.”
Joe Athialy of the Centre for Financial Accountability argued that the issue lies in both the intent and the context of the amendments. He said the FCRA is increasingly being “weaponised”, with licences of numerous organisations cancelled, effectively criminalising dissent as well as development work. “What is happening to FCRA organisations is not in isolation,” he noted, placing it within a broader pattern of shrinking democratic space in the country.
“At a time of serious economic stress, targeting NGOs that are working to support communities reflects deep insensitivity,” said Athialy, observing that the government appears indifferent to the real challenges faced by ordinary people.
