The FCRA License (Foreign Contribution (Regulation) Act, 2010) has once again grabbed headlines as several non-governmental organizations (NGOs) have had their licenses cancelled. Notable entities affected include the CNI Synodical Board of Social Service, Voluntary Health Association of India, Indo-Global Social Service Society, Church Auxiliary for Social Action, and Evangelical Fellowship of India. This isn’t an isolated incident; in the past two years, more than 100 NGOs, including well-known names like the Centre for Policy Research, Rajiv Gandhi Foundation, Rajiv Gandhi Charitable Trust, and Oxfam India, have had their FCRA licenses revoked over allegations of misusing foreign grants.
Why is an FCRA License Necessary?
Harish Kumar, a partner at Luthra and Luthra Law Offices India, explains, “In order to receive foreign contributions or donations from a ‘foreign source’, it is imperative to obtain prior permission or an FCRA registration license from the Ministry of Home Affairs (MHA). Without this registration or prior permission, accepting foreign contributions is illegal.”
“It’s important to note that an organization can seek prior permission if it lacks FCRA registration but has assurance from a foreign source. This prior permission allows for receiving a specific amount from a specific donor for carrying out particular activities or projects, and it remains valid for a duration specified in the permission. However, FCRA registration can be pursued without any commitment from a foreign source and typically remains valid for a period of five years,” he explains.”
Sanjay Jain, a senior advocate and former Assistant Solicitor General (ASG), explains the function of FCRA licenses, which are issued to NGOs, societies, or charitable trusts receiving foreign funds as donations. The purpose of the Act is to oversee foreign contributions or donations and hospitality, safeguarding against contributions that might jeopardize national interests. It establishes a licensed system to oversee and prohibit the acceptance and use of foreign contributions or hospitality by different entities engaging in activities deemed harmful to national interests.
What Causes an FCRA License to be Cancelled?
There are multiple factors that can lead to the revocation of an FCRA license, such as failure to comply with the FCRA Act or its regulations, improper use of foreign funds, neglecting to submit necessary reports to the Ministry of Home Affairs (MHA), or engaging in activities deemed detrimental to India’s national interests or security. Additionally, an organization may lose its license if it remains inactive for two consecutive years or ceases operations altogether.
Lalit Kumar, a partner at JSA, emphasizes that the government retains the authority to cancel registration if foreign contributions are received in violation of the FCRA. He outlines several reasons for potential cancellation, including obtaining registration through false representations, breaching conditions stipulated in the certificate, or misappropriating foreign funds.
Sanjay Jain recalls the suspension of the Centre for Policy Research’s license in 2023, underscoring the misuse of foreign contributions as a prominent example of what can lead to such severe actions.
When Will the FCRA Approval be Revoked?
The FCRA registration is valid for five years. After this time, renewal is required; failure to renew will result in approval being withdrawn. Furthermore, FCRA registration may be suspended or cancelled under specific conditions as previously mentioned.
How Many FCRA Licenses Have Been Issued and Revoked in Recent Years?
Sanjay Jain reports that as of April 3, 2024, there are 16,242 NGOs currently operating with active FCRA licenses. In contrast, the licenses of 14,396 NGOs have expired, and an additional 20,701 NGOs have had their licenses cancelled for various reasons since 1976, the year the Act was enacted.
What is an FCRA License?
The FCRA (Foreign Contribution Regulation Act) license is a legal authorization granted by the Government of India to non-governmental organizations (NGOs) and other entities, allowing them to receive foreign contributions or donations for specific purposes as defined under the FCRA regulations Website link.
What is the Cost of an FCRA License?
The cost of obtaining an FCRA license can vary depending on factors such as the type of organization and the services provided. However, it typically involves application fees and other administrative costs. Specific details regarding the exact cost can be obtained from the relevant government authorities responsible for FCRA registration. The government requires a fee of ₹5,000 for FCRA prior permission and ₹10,000 for a new FCRA registration for trusts.
How do I get FCRA Permission?
To obtain FCRA permission, organizations need to apply to the Ministry of Home Affairs, Government of India, through the designated online portal or offline mode. The application process involves submitting various documents and fulfilling specific criteria outlined by the FCRA regulations. Once the application is submitted, it undergoes review and scrutiny by the authorities, and if found compliant, the FCRA license is granted.
