Everything you need to know about the Foreign Contribution Amendment Bill, 2020

by mehekkaoberoi


  • The Foreign Contribution (Regulation) Amendment Bill, 2020 modifies the 2010 Foreign Contribution (Regulation) Act.
  • The Act regulated how individuals, groups, and businesses accept and use foreign contributions.
  • Individuals may accept foreign contributions without the consent of the MHA. However, the maximum amount of foreign contributions that can be accepted was Rs. 25,000 according to the act of 2010.
  • The Act assured that receivers of foreign donations stay true to the stated purpose for which they were received.
  • Organizations were required to register every five years under the Act.


  • According to the government, the purpose of the Act is to improve compliance, openness, and accountability in the receiving and use of foreign contributions, as well as to facilitate genuine non-governmental organizations or groups that work for the common welfare.
  • Between 2010 and 2019, the yearly inflow of foreign contributions nearly doubled, although many foreign contribution recipients have not used the funds for the purposes for which they were registered or granted prior authorization under the FCRA 2010. The Union Home Ministry has suspended the licenses of six non-governmental organizations (NGOs) accused of using foreign donations for religious purposes.
  • Many people were not complying to statutory requirements such as filing annual returns and keeping correct records.
  • Such a circumstance could have jeopardized the country’s internal security.
  • The new bill intends to improve openness and accountability in the receiving and use of foreign contributions, as well as to make it easier for legitimate non-governmental organizations or associations to work for the common good.

Сurrent  Sсenаriо:-

  • On 29 September 2020, The Foreign Contribution (Regulation) Amendment Bill, was passed by the Parliament.

Proposed amendments- the Bill

  • It aims to make it illegal for ‘public servants’ to receive any foreign funding.
  • It proposes that NGOs utilize foreign funding to cover administrative expenditures by reducing their utilization of foreign funds from 50% to 20%.
  • Its goal is to “prevent any transfer of foreign contribution to any association or person.”
  • It recommends making Aadhaar cards a requirement for all office holders, directors, employees and other key functionaries of NGOs or associations eligible to receive foreign donations..
  • Foreign contributions must only be received in an account designated by the bank as an FCRA account in such branches of the State Bank of India, New Delhi, according to the Bill. This account should not receive or deposit any funds other than the foreign contribution.
  • Certain aspects of the Amendment Act need to be clarified further. While the Amendment Act was notified on September 29, 2020, NGOs will have to wait until the amendment rules under the Act are notified.


  • The Bill proposed a number of drastic changes to the law governing receipt of foreign contributions and which will have a detrimental impact on charitable institutions in India.
  • The Bill would have a negative impact on the livelihoods of workers connected with small NGOs and could lead to the demise of the entire social sector, as administrative expense caps would make even larger NGOs unable to operate.
  • It will have a significant impact on joint research in vital subjects in India, as foreign-funded organizations will no longer be able to transfer funding to small grassroots NGOs.
  • The government wants to keep track of NGOs that are involved in questionable activity. However, failing to recognize the diversity of NGOs, which includes globally recognized world-class organizations, will suffocate their competitiveness and inventiveness.
  • According to a resolution passed by the United Nations Human Rights Council on protecting human rights defenders, no law should prohibit or delegitimize acts in defense of human rights based on the source of support.
  • The Bill also violates India’s international legal duties and constitutional provisions to safeguard and protect the rights to freedom of expression, association, and assembly.
  • The amendments also presume that NGOs that receive foreign donations are culpable until they can demonstrate differently.

Content contributed by- Meghna. Manoj

 5,810 total views

0 comment

Related Articles