FCRA amendment in 2020 to discourage NGOs from spending on posh buildings and luxurious vehicles: MHA annual report

The steps help to effectively monitor the receipt and utilisation of foreign contribution, says Ministry

The Foreign Contribution (Regulation) Act was amended in 2020 to discourage expenditure by non- government organisations (NGOs) on “unproductive items” such as “inflated staff salaries, posh buildings and office and luxurious vehicles,” the Ministry of Home Affairs has said in its 2021-22 annual report.

The Ministry said that the Foreign Contribution (Regulation) Amendment Act, 2020 was passed by Parliament in September 2020 and was notified on September 28 the same year. “The amendments made in the Act would help effectively monitor the receipt and utilisation of foreign contribution,” it said.

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It said that provisions such as Aadhar numbers of all key functionaries of NGOs, receipt of foreign contribution only through designated FCRA bank accounts with the State Bank of India, complete ban on domestic transfer of foreign funds and reduction of administrative expense limit from 50% to 20% “would ensure exact identification of office-bearers and eliminate chances of benami/bogus entry and would discourage expenditure on unproductive items like inflated staff salaries, posh buildings and office and luxurious vehicles etc.”

On October 27, Union Home Minister Amit Shah at the State Home Ministers’ Conference in Faridabad said that some NGOs were involved in anti-national activities, religious conversion, political opposition to development projects or propaganda against policies of the government. He said the amendments to FCRA in 2020 successfully prevented the misuse of foreign funding and effective monitoring became possible. FCRA is a mandatory requirement to receive foreign funds.