Economy

Public servants to be barred from receiving foreign contribution

TOI

Public servants will be barred from receiving any foreign contribution and the NGOs or associations registered under the Foreign Contribution (Regulation) Act, 2010, cannot use more than 20% of their foreign contributions towards meeting administrative expenses, according to amendments proposed to FCRA by the home ministry. The FCRA (Amendment) Bill, 2020, is listed for introduction in the Lok Sabha on Sunday. The definition of public servant would be as per Section 21 of the Indian Penal Code.

As per existing provisions in FCRA, NGOs/associations holding FCRA licence can use up to 50% of their foreign contributions towards meeting administrative expenses like salaries etc. This limit is proposed to be reduced to 20%.

As per statement of objects and reasons of the Bill, there is need to streamline the provisions of FCRA by strengthening the compliance mechanism, enhancing transparency and accountability in the receipt and utilisation of foreign contribution worth thousands of crores of rupees every year and facilitating genuine NGOs or associations who are working for the welfare of the society.

As per the amendments proposed in FCRA Amendment Bill, Section 7 is to be revised to prohibit any transfer of foreign contribution to any association or person. Also, any person who makes an application for prior permission or seeks registration under FCRA or renewal of his FCRA licence will now have to mandatorily furnish aadhaar number of all its office bearers or directors or other key functionaries, or, in case of a foreigner, a copy of the passport or overseas citizen of India card.

The Bill also proposes to enable the Central government to allow an NGO/association to surrender its FCRA certificate. Such surrender may be allowed, if, after making an inquiry, the Centre is satisfied that such person has not violated any provision of the Act and the management of foreign funds and assets created out of foreign contribution is vested in the competent authority.

In yet another important amendment, all NGOs and associations registered or granted prior permission under FCRA would be required to receive foreign contribution exclusively in a designated FCRA account to be opened in the State Bank of India at New Delhi or as the Centre shall specify by notification. However, the entities may also open one or more accounts in other banks for keeping or utilizing the foreign contribution received from his FCRA account in SBI, New Delhi.

The SBI, New Delhi branch or any other bank subsequently where such designated FCRA account is opened, shall report to the home ministry the prescribed amount of foreign remittance, the sources and manner in which it was received and other particulars.

The annual inflow of foreign contribution has almost doubled between 2010 and 2019 but many NGOs/associations have not utilised the funds for the declared purpose, as per the statement of objects and reasons for the Bill. Many were found wanting in ensuring basic statutory compliances such as submission of annual returns. As a result, the home ministry had to cancel the FCRA certificates of over 19,000 organisations between 2011 and 2019. Criminal investigation also had to be ordered against dozens of NGOs which indulged in outright misappropriation or misutilisation of foreign contribution.

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