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#1 : The perfect kickstart to FCRA for beginners!

Before we dive into the provisions regarding raising foreign contributions from foreign sources, it is important to understand the nature of this act i.e whether it is civil or criminal, strictly interpreted or has space for liberal interpretation and the true spirit/intention of the legislators. 

1. The use of the word “REGULATION” in the short title i.e ‘Foreign Contribution (Regulation) Act, 2010’ makes it clear that the sheer intention of the legislators is ‘to regulate’ the incoming foreign funds which will be utilised for one or more non-profit purposes in India.

2. The above point clears that the central government is more cautious about who is the foreign source, how the foreign contribution is being utilised, by whom it is being received and for what purposes and thereby regulates the entire process of the same.

3. Does the Act prescribe civil penalties only or are there any criminal repercussions as well ? : Broadly the Act prescribes offences which are compoundable in nature. Overall, five major repercussions are stipulated in the Act and their governing rules, they are —

    • seizure and confiscation of receipts of foreign contributions.
    • inspection of accounts and records. 
    • fine upto x times of the value of foreign contribution spent.
    • imprisonment in certain cases.
    • prohibition on accepting foreign contributions.

Why FCRA ? : 

Here’s the long title to the Act –

“An Act to consolidate the law to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected..” 

  • It regulates both the acceptance and utilisation of foreign contributions.
  • it also regulates the foreign hospitality offered, if any.
  • it further prohibits any foreign contribution accepted or being utilised for any activities which is detrimental to the national interest. Hence, no contributions from abroad can be accepted or utilised if it affects the national interest.
  • The above regulations and prohibitions are applicable to every person which includes associations (whether registered or not), companies or any other body corporate.

TO SUM UP, Foreign Contribution (Regulation) Act, 2010 is internal security legislation and regulated by the Ministry of Home Affairs which prohibits certain classes of persons from receiving ‘foreign contribution’. It also restricts certain classes of persons from accepting foreign hospitality while visiting any country or territory outside India, without the prior permission of the Central Government. 

The Act provides that persons having definite cultural, economic, educational, religious and social programmes should get themselves registered with the Government of India before accepting any ‘foreign contribution’.

#2 on FCRA series will explain more on what counts as ‘foreign source’, ‘foreign contribution’, how to obtain registration and is there an alternative to registration and many more explainers! 

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Uzair is a CS Professional Student. He is also an Education Activist working for inclusive literacy for tribals and youth. He scored 60+ in 7 subjects out of 8 in CS Executive and has an inclined interest towards Corporate Governance, Audit & related subject matters. Would love to hear yo View Full Profile

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