Govt Set to Amend FCRA, Make Aadhaar Compulsory to Accept Foreign Donation

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The government's proposed amendments to the Foreign Contribution Regulation Act (FCRA) will make Aadhaar a compulsory identification document to accept foreign donation. The amendment will also bar public servants and government-owned corporations from receiving any foreign contribution.

In section 3, sub section 1, clause (c), the government proposes to add public servants to the list of those excluded from receiving FCRA donations. Currently the list includes," judge, Government servant or employee of any corporation or any other body controlled or owned by the Government”. While public servant has been defined as per section 21 of the Indian Penal Code, corporation would include any entity owned or controlled by the government.

A new section 12A would make Aadhaar card mandatory for those seeking foreign contribution. The proposed section says, “Notwithstanding anything contained in this Act, the Central Government may require that any person who seeks prior permission or prior approval under section 11, or makes an application for grant of certificate under section 12, or, as the case may be, for renewal of certificate under section 16, shall provide as identification document, the Aadhaar number of all its office bearers or Directors or other key functionaries, by whatever name called, issued under the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016, or a copy of the Passport or Overseas Citizen of India Card, in case of a foreigner.”

Restrictions have also been put on NGOs under the proposed amendment on how they can utilise the foreign funding. The proposed amendment to the Act says NGOs cannot use more than 20 per cent of their foreign contributions towards meeting administrative expenses. Currently, the limit is 50% for paying salaries or meeting other administrative needs.

The amendments, if passed, will also prevent transfer of foreign contribution from one association or person to another. The amended bill allows NGOs to receive foreign donation 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 utilising the foreign contribution received from the FCRA account in SBI, New Delhi, the draft says.

The statement of objects and reasons of the Bill says 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.