Centre Amends Rules For Receiving Foreign Funds

The government has amended the rules for receiving foreign funds requiring NGOs to choose from predefined list of purposes and their area of operation, allowing a range of faith-based activities while explicitly excluding proselytisation from several categories eligible for registration under the Foreign Contribution Regulation Act (FCRA).

In a gazette notification issued on Monday, the Union Home Ministry also said any association having foreign nationals, other than those of Indian origin, as its key functionaries will "ordinarily not be considered" for grant of registration or prior permission to receive foreign funds under the Act.

The amended rules carved an exception allowing the central government to specify such cases or circumstances through an order in which foreign nationals may be permitted to be "key functionaries" of an association for registration or prior permission under FCRA, the notification said.

The government has notified a number of amendments in the FCRA rules, 2011, tightening the accountability for how non-governmental organisations (NGOs) and associations in India receive and use foreign money.

The amendments have broadened the definition of "key functionary in relation to a person other than an individual" to cover a wide range of roles including company directors, partners in firms, trustees, the 'Karta' of a Hindu Undivided Family, and any person who has control over the management of the association.

The government has introduced a new clause wherein NGOs seeking registration for receiving foreign funds will have to specify exact purpose and state or Union Territory of its operations.

"Every application for registration shall mention the purpose or purposes for which registration is sought, chosen only from such list of purposes as specified in the Schedule appended to these rules; and the states or Union territories in which the association proposes to undertake the activities," the notification said.

The details shall be specified on the certificate issued to the NGO, it said.

The applications must now choose their activities from a "Schedule" provided in the rules, covering religious, cultural, economic, educational, and social categories as purposes.

Under the religious purposes, various activities have been listed ranging from construction, renovation, and maintenance of religious places, religious education to promotion of devotional music, among others.

The rules specify that three purposes-- religious education, documentation of faith traditions and preservation of indigenous beliefs-- must be carried out "excluding proselytisation".

The condition has also been mentioned in "documentation, preservation, and revival of indigenous and tribal faith practices, rituals and systems of worship" and "conduct of religious education, moral instruction, satsangs, discourses, and meditation retreats".

The rules give one year to all associations registered before 2026 to disclose to the government their specific purposes and states they want to keep in their registration.

The Centre has also introduced a fee structure through the amended rules where an additional Rs 300 will be charged for every extra state or purpose added to the application.

In order to prevent inactive NGOs from holding onto licences, the government has introduced a minimum spending limit of Rs 10 lakh of foreign contribution on its chosen activities over the last two financial years.

For an NGO to renew its registration or avoid cancellation, it must have spent the amount of foreign contribution over the last two years on its chosen activities.

The NGOs receiving foreign funds for specific purpose under "Prior Permission", the second or any later instalment of funds will only be released after it has utilised at least 75 per cent of the previous instalment, the notification said.

The government will conduct a field inquiry to verify the utilisation, it said.

The NGOs receiving foreign funds must now provide details of their social media accounts in their applications for registration or renewal under FCRA.

If money comes through "intermediary remittance vehicles" or "Donor Advised Funds", the NGO must disclose the ultimate donor (the original source of the money) in their applications.

Annual returns must now include a "detailed activity report" alongside financial statements, the rules said.

The NGOs will have to declare if any books, articles have been published by them or their key, as they are prohibited from producing or broadcasting "news or current affairs".

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