Centre amends FCRA rules, tightening foreign funding norms for NGOs.
NGOs must select predefined activities and disclose operational regions.
New FCRA rules expand disclosure of donors, websites, and social media.
The Union government has tightened the regulatory framework governing foreign funding received by non-governmental organisations (NGOs), introducing a series of amendments that require organisations seeking global contributions to disclose more information about their activities, sources, management structure and geographical areas of operation.
The move, announced by the Ministry of Home Affairs (MHA) through a gazette notification, is specifically focused on excluding proselytisation from several categories eligible for registration under the Foreign Contribution (Regulation) Act (FCRA).
What Has Changed?
At the heart of the amendments is a new requirement that NGOs specify the exact purpose for which they intend to receive foreign funds. Organisations will now have to select their activities from a predefined list under five broad categories: social, economic, educational, cultural, and religious.
They must also identify the States and Union Territories (UTs) where they plan to operate. These details will form part of the registration certificate issued under the FCRA, effectively linking organisations to approved activities and geographical areas.
The government has also introduced additional fees, requiring NGOs to pay extra charges for every additional purpose or State/UT included in their application.
Details of Websites and Social Media Required
The amended rules significantly increase disclosure obligations for NGOs. Organisations applying for registration or renewal must now provide details of their websites, social media accounts, and publications. Annual returns will also need to include detailed activity reports in addition to financial statements.
Another change concerns foreign donations routed through intermediary remittance channels or donor-advised funds. NGOs will now have to disclose the ultimate donor, allowing authorities to trace the original source of funding more effectively.
Broadened Definition of Key Functionary
The government has broadened the definition of a "key functionary" beyond office-bearers and directors. The revised rules now cover trustees, partners in firms, members of governing bodies, the Karta of a Hindu Undivided Family (HUF), and any individual exercising control over an organisation’s management.
The amendments also state that associations with foreign nationals as key functionaries will ordinarily not be eligible for FCRA registration or prior permission. However, exceptions may be granted in specific cases by the Central government, while persons of Indian origin are exempt from this restriction.
Tighter Conditions For Receiving and Retaining Foreign Funds
The Centre has introduced measures aimed at ensuring that only active organisations continue to hold FCRA registrations. NGOs seeking renewal must demonstrate that they have spent at least ₹10 lakh in foreign contributions on approved activities during the previous two financial years.
For organisations receiving funds through the "prior permission" route, subsequent instalments of foreign contributions will be released only after at least 75% of the previous instalment has been utilised. The government may also conduct field inquiries to verify fund utilisation before approving further disbursements.
Action on Religious Activities
The amendments provide a more detailed framework for religious organisations seeking foreign funding. Permitted activities include the maintenance of places of worship, religious education, preservation of faith traditions, and spiritual programmes.
However, the rules explicitly state that certain activities, including religious education and documentation of faith traditions, must be carried out while excluding proselytisation. The inclusion of this condition is likely to attract attention given the ongoing debate surrounding foreign-funded religious activities in India.
What’s the Need?
The government always pushed to improve transparency, accountability and traceability in the receipt and utilisation of foreign contributions. The Ministry of Home Affairs (MEA) stated that the amendments will bring greater uniformity to FCRA filings, reduce duplication in reporting requirements, and strengthen monitoring mechanisms.
Union Home Minister Amit Shah has previously stated that foreign funding “cannot remain unmonitored” and stressed that strict action will be taken against organisations found violating provisions of the FCRA.
Fines for Violations
The Ministry of Home Affairs (MHA) has issued another order specifying penalties for violations under the Foreign Contribution (Regulation) Act (FCRA), including excess administrative expenditure, speculative investments, misuse of funds, unauthorised receipt or use of foreign contributions and utilisation of funds for purposes or in States/Union Territories not covered under an organisation’s approval.
According to the order, any diversion of funds from the approved purpose can attract a penalty of up to 30% of the amount misused or ₹1 lakh, whichever is higher. A similar penalty applies to the use of foreign funds for activities or locations outside the scope of approval or registration.
The order further states that violations such as exceeding permitted administrative expenditure limits or engaging in speculative use of funds will also be penalised with fines calculated as a percentage of the amount involved, subject to a minimum penalty of ₹1 lakh.
