Brain Booster for UPSC & State PCS Examination (Topic: Foreign Contribution (Regulation) Amendment Bill, 2020)

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Topic: Foreign Contribution (Regulation) Amendment Bill, 2020

Foreign Contribution (Regulation) Amendment Bill, 2020

Why in News?

  • Parliament passed the Foreign Contribution (Regulation) Amendment Bill, 2020, making it mandatory for office bearers of Non-governmental organisations (NGOs) to provide their Aadhaar numbers while registering among other changes.
  • The Bill will amend the Foreign Contribution (Regulation) Act, 2010.

Key Amendments

  • The Bill regulates the acceptance and utilisation of foreign contribution by individuals, associations and companies. Foreign contribution is the donation or transfer of any currency, security or article (of beyond a specified value) by a foreign source.
  • A registered person must accept foreign contribution 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 person may open another FCRA account in any scheduled bank of their choice for keeping or utilising the received contribution. ''FCRA Account'' which shall be opened in such branch of the State Bank of India at New Delhi.
  • Person who receives foreign contribution must use it only for the purpose for which the contribution is received. Further, they must not use more than 50% of the contribution for meeting administrative expenses. The Act reduces this limit to 20%.
  • Every person who has been given a certificate of registration must renew the certificate within six months of expiration. Now, government may conduct an inquiry before renewing the certificate to ensure that the person making the application:
  • is not fictitious or benami,
  • has not been prosecuted or convicted for creating communal tension or indulging in activities aimed at religious conversion, and
  • has not been found guilty of diversion or misutilisation of funds, among others conditions.
  • Certain persons are prohibited to accept any foreign contribution. These include: election candidates, editor or publisher of a newspaper, judges, government servants, members of any legislature, and political parties, among others. Amendment adds public servants (as defined under the Indian Penal Code) to this list.
  • Foreign contribution cannot be transferred to any other person unless such person is also registered to accept foreign contribution. The term ‘person’ under the Act includes an individual, an association, or a registered company.
  • The amendment has added 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 Bill.
  • Government may suspend the registration of a person for a period not exceeding 180 days. Now such suspension may be extended up to an additional 180 days.

Significance of the Amendments

  • FCRA is a law for national and internal security, aimed to ensure that foreign funds do not dominate the political and social discourse in India.
  • The Act prohibits foreign contribution for any activities that pose a danger to national interest.
  • Nityanand Rai, the minister of State for Home, said in the House that the legislation was an attempt to bring transparency. He added that the amendments were in the interests of NGOs that wanted to do good work.
  • Advocates of the Bill say misguided environmental concerns and agenda-based activism have put brakes on several key developmental projects, and that many such NGOs involved in these protest movements are recipients of foreign funding.

Dismayed Response

  • The NGOs argue that the Bill is a warning by the government to fall in line or face the consequences.
  • According to the International Commission of Jurists (ICJ), the legislation fails to comply with “India’s international legal obligations and constitutional provisions to respect and protect the rights to freedom of association, expression, and freedom of assembly”.
  • The ICJ added that the provisions of the Bill will impose “arbitrary and extraordinary obstacles” on the capacity of human rights groups and other members of civil society to carry out their work