What is FCRA? Explained as MHA revokes license of Sonam Wangchuck's NGO

THe strange Contributions ( ordinance) move (FCRA) has once again been brought to the head after the Ministry of Home Affairs (MHA) cancelled the FCRA licence of an NGO related to climate activist Sonam Wanchuck, citing irregularities.The action came on Thursday, just a day after the protests over the demand for a sixth schedule recognition for Ladakh, led by Wangchuk, turned violent and resulted in the death of at least four people. The government has said that the violence erupted due to Wangchuk’s “provocative statements”.Many, including the activist, are calling the cancellation of the FCRA licence of Students Educational and Cultural Movement of Ladakh (SECMOL) a “witch hunt”. The CBI is looking into the matter.So the question is, what exactly is the FCRA?FCRA explainedThe government of India enacted the FCRA in 1976 during the Emergency period, citing apprehensions that foreign powers were interfering in the country's affairs by pumping money into it through independent organisations. The law was brought in to regulate foreign donations to individuals and associations so that they functioned “in a manner consistent with the values of a sovereign democratic republic.”After its enactment in 1976, the FCRA has been amended multiple times, including by both the UPA and the current NDA governments.The Congress-led UPA enacted the amendment in 2010 to “consolidate the law” on utilisation of foreign funds. It was “to prohibit” the use of foreign funding for “any activities detrimental to national interest”.Just a decade later, the Narendra Modi government again amended the law in 2020, tightening the grip over foreign funds received by non-governmental organisations (NGOs)What is FCRA?The FCRA requires every person or NGO seeking to receive foreign donations to fulfil three broad criteria:The first criterion is to register under the Act. The individual or organisation then needs to open a bank account in the State Bank of India, Delhi, for the receipt of the foreign funds. The third point in the law is that the recipient must utilise those funds only for the purpose for which they have been received and as stipulated in the Act.The individuals of the organisations falling under the law are also required to file annual returns. The funds cannot be transferred to another NGO.According to the law, no foreign funds are allowed for candidates for elections, journalists or newspaper and media broadcast companies, judges and government servants, members of legislature and political parties or their office-bearers, and organisations of a political nature.The rules under FCRA were changed in July 2022, broadening the list of compoundable offences under the law from seven to 12. The government no longer needs to be informed of any contribution under ₹10 lakh that is received from relatives living in a foreign country. The time limit for informing the authorities about the opening of bank accounts was also increased.Another big change that came after the change of rules was that people of organisations that fall under the barred category under the FCRA, like political parties or election candidates, among others, could receive contributions from relatives living outside India and would not be prosecuted if they don't inform the authorities within 90 days. However, the recipient will be required to pay 5 per cent of the foreign contribution received.