Registration under FCRA is mandatory for NGOs to receive foreign funds. | Photo credit: Reuters
The Union Government is likely to amend the Foreign Contribution (Regulation) Act in the ongoing Parliament session. One of the key proposed changes is the appointment of a “designated authority” to take over, manage or dispose of assets generated from foreign funds by an NGO or association that has had its FCRA registration suspended, revoked or not renewed.
Another proposed change expands the definition of “key officer” of an NGO beyond “officer/director” to include a director; partners; administrators; karta (head) of the Hindu Undivided Family; office bearers or members of the governing body or management committee of a company, trust, trade union or association; and any other person having control or responsibility for the management or affairs of such organization.
The amendment also proposes to make key officials liable for offenses under the FCRA if they cannot show lack of knowledge or due care.
Registration under FCRA is mandatory for NGOs to receive foreign funds. Until now, the parent law of 2010 only had provisions regulating the flow of foreign funds, not a legal framework for the management of assets created from these funds.
The Foreign Contribution (Regulation) Amendment Bill, 2026 also proposes to amend section 43 of the parent Act, which will require any law enforcement agency or state government to seek prior approval from the central government to initiate investigations into FCRA-related complaints.
A statement on the objects and reasons of the bill circulated among Lok Sabha members by Union Home Minister Amit Shah said that currently around 16,000 associations are registered under the FCRA and receive around ₹22,000 crore annually.
It said the 2010 FCRA regulates the receipt and use of foreign contributions and foreign hospitality to ensure that such inflows do not adversely affect national interests, public order or national security.
The law came into effect on May 1, 2011, and was amended in 2016, 2018 and 2020. “Certain operational and legal loopholes have been identified over the period, particularly in relation to the handling of foreign deposit and assets created from it in cases where registration is cancelled, surrendered or otherwise lapsed,” the statement said.
Section 15 of the Act provides for the management of assets, but the absence of a comprehensive framework for the supervision, management and management of such assets has led to administrative uncertainty and room for abuse.
“Furthermore, the volume of investigations, inconsistency in penalties, absence of timetables for utilization, lack of an express provision for deregistration, and ambiguity regarding the treatment of assets during the suspension have led to implementation problems,” the statement continued.
The bill also proposes deadlines for receiving and withdrawing foreign contributions based on prior authorization, automatic suspension of certificates upon expiration or non-renewal, clearer rules for handling assets during suspension, and streamlined penalties.
The bill proposes to reduce the maximum prison sentence for FCRA offenses from five years to one year. It proposes fixed deadlines for the use of foreign funds received under the “prior authorization” category (one-time receipt of funds), in contrast to the open-ended provision under the 2010 Act.
Published – 23 March 2026 23:27 IST
