Examine critically the recent changes in the rules governing foreign funding of NGOs under the Foreign…

Question

Examine critically the recent changes in the rules governing foreign funding of NGOs under the Foreign Contribution (Regulation) Act (FCRA), 1976.

Ghissu Editorial · Accepted Answer

The FCRA 2010 and its 2011 Rules replaced the 1976 law with five-year registration, a bar on political organisations and spending caps, but vague grounds and selective enforcement turned regulation into control. In 2015 about 9,000 NGOs lost registration and Greenpeace India's licence was cancelled.

**Introduction**

The FCRA 1976 was replaced by the FCRA 2010 and the FCRA Rules 2011, in force from May 2011, and their vigorous enforcement in 2015 sharpened the debate between national security and the freedom of association under Article 19(1)(c).

**Recent Changes and Their Rationale**

SKETCH: timeline | Tightening of FCRA
- 1976 :: FCRA enacted
- 2011 :: 2010 Act in force
- 2015 :: Mass cancellations
- 2016 :: Foreign source redefined
- 2020 :: Sub-grants banned

1. **Renewable registration**: Registration, once permanent, now lapses every five years, so an NGO's record is reviewed before renewal.
2. **Political bar**: Organisations "of a political nature", identified under Rule 9 by markers such as bandhs and rasta roko, cannot take foreign money.
3. **Spending discipline**: Administrative spending was capped at 50%, speculative investment barred and a designated bank account made funds traceable.
4. **Stricter enforcement**: About 9,000 NGOs lost registration in 2015 for not filing returns, and online filing and quarterly disclosure became mandatory.

**Concerns over the Changes**

1. **Vague grounds**: Terms like "public interest" give officials wide discretion, as Greenpeace India's cancellation in 2015 after its anti-coal campaigns showed.
2. **Double standard**: A 2014 Intelligence Bureau report branded foreign-funded NGOs anti-development, yet the Finance Act 2016 retrospectively redefined "foreign source" to shield political parties' donations.
3. **Weak due process**: Suspension for 180 days and frozen accounts precede any finding, and the 2020 ban on sub-grants, upheld in Noel Harper (2022), hit small groups hardest.

**Conclusion**

The changes rightly sought transparency, but vague grounds and selective enforcement turned regulation into control. Clear criteria, time-bound hearings and an independent appeal would keep foreign money accountable without shrinking India's civic space.

Examine critically the recent changes in the rules governing foreign funding of NGOs under the Foreign Contribution (Regulation) Act (FCRA), 1976.

Model answer

Practise this question

NGOs5 questions

Ghissu