Centre Tightens FCRA Rules on Foreign Funding of NGOs

The Union Home Ministry has tightened the rules that govern foreign funding of non-governmental organisations under the Foreign Contribution (Regulation) Act, or FCRA. Two notifications sharply revise penalties, link registration to specific purposes and locations, and explicitly bar foreign money from being used for religious conversion activities.

The first notification amends the Foreign Contribution (Regulation) Rules, 2011. Every FCRA registration must now spell out both the purposes for which foreign funds may be used and the states or union territories where the work can be carried out. Organisations have to pick their activities from a government-prescribed schedule of 105 permissible purposes. Existing registered bodies have been given one year to declare the purposes and areas they wish to keep, and any later expansion will need fresh approval.

The rules also widen the definition of a 'key functionary', restrict registration for organisations that have foreign nationals in key management posts, set a minimum-utilisation requirement before renewal, tighten conditions for releasing later instalments of foreign funds, and demand fuller disclosures in annual returns. These disclosures now include activity reports, social-media account details and information on ultimate donors. The second notification revises the compounding penalties for violations.

The government's stated aim is to make the flow of foreign money more transparent and to keep it away from proselytising. Civil-society groups, however, fear that purpose-based and geography-linked registration could reduce the flexibility that many NGOs need to respond to changing ground realities. The move thus revives a long-running debate over how to balance national-security and transparency concerns with the freedom of associations.

For aspirants this is a clean polity-and-governance case study. It touches the regulation of civil society, the role of the Home Ministry, and the tension between transparency and the right to form associations under Article 19. The figure of 105 permissible purposes and the one-year compliance window are precise, exam-ready facts.