The receipt of foreign contribution is regulated by the provisions of the Foreign Contribution (Regulation) and the Foreign Contribution (Regulation) i.e. fcra. In India funding, by foreign development agencies is covered by the Foreign Contribution (Regulation) and the nodal ministry for regulating this Act is the Ministry of Home Affairs. The objectives of the Act are as stated in its preamble.
These can be briefly summarized as an Act to regulate the acceptance and utilization of foreign contribution by certain persons or associations so that such persons or associations may function in a manner consistent with the values of a sovereign democratic republic.
A wishes to utilize funds of a foreign development funding agency has to register under the FCRA Act. This is easier said than done. The department as a practice does not register organizations which come to it for the first time. In such cases, the NGO has to apply for prior permission for any funds that it is likely to receive.
The department invariably gets a survey done by the applicant organization by state intelligence agencies.
Receipt and utilization of foreign contribution by associations (NGOs), ngo consultancy and acceptance of foreign hospitality by individuals working in important areas of national life are regulated under the provisions of the Foreign Contribution (Regulation) Act, 1976.
The purpose of this Act, which came into force from 5th August, 1976, is to ensure that acceptance and utilization of foreign contribution by associations i.e. through ngo registration and other voluntary organizations as well as acceptance of foreign hospitality by individuals working in the important areas of national life (like judges, public servants, office bearers of political parties, members of legislature, etc.) is in a manner consistent with India’s values as a sovereign, democratic republic.
The Act intends to put in place a system of screening to ensure that the associations or office bearers thereof do not divert the foreign contribution towards pursuits detrimental to national interest.
provision of fcra in ngo
The general policy adopted by the Government of India is not to encourage soliciting of foreign contribution, but if it is intended for genuine activities with a focus on definite cultural, economic, educational, religious or social program, the same can be accepted either by obtaining prior permission or registration under the Act from the Central Government. Such associations are required to submit annual accounts (duly audited) in prescribed FC-3 form to the Central Government within four months of closure of financial year i.e. by 31st July of the subsequent year.
The provisions of the Foreign Contribution (Regulation) Act, 1976 regulate the receipt of foreign contribution in the country. The Foreign Contribution (Regulation) Rules 1976 contain the various forms prescribed for this purpose. You can read more about fcra.
