FCRA Amendment Bill 2026 raises alarm over government seizure of NGO assets

The Foreign Contribution (Regulation) Amendment Bill, 2026, introduced in the Lok Sabha in March, has triggered criticism from opposition parties, legal experts, and civil society groups over a provision that would allow the government to take control of assets built with foreign funding.

The Bill marks a significant shift in India’s foreign funding regime. Earlier amendments to the FCRA focused on restricting foreign donations and tightening compliance rules for non-governmental organisations. The 2026 proposal goes further by creating a mechanism for the state to take ownership of physical assets created with foreign contributions.

At the centre of the Bill is a new “Designated Authority” to be created under a proposed Chapter IIIA of the Act. The authority would be empowered to manage and take control of assets belonging to organisations whose FCRA registration is cancelled, surrendered, or allowed to expire without renewal.

Under the proposed law, any property built wholly or partly with foreign funds could come under government control if an organisation loses its licence. This includes schools, hospitals, hostels, offices, and community centres.

Critics say the language of the Bill goes beyond temporary management. The proposal uses the term “vesting”, a legal expression referring to the transfer of ownership and title. Lawyers argue that this means the government could permanently acquire such properties rather than merely administer them.

The Bill has also raised concerns because it does not distinguish between assets built with foreign funds and those created with domestic donations. Rights groups say that if even a small portion of a building was financed through foreign contributions, the entire property could be taken over.

For example, a rural hospital or school built through a mix of local donations and foreign grants could be seized if the organisation’s FCRA licence is not renewed on time or is cancelled. Civil society groups warn that this creates a serious risk for organisations that depend on annual licence renewals and often face administrative delays.

Several constitutional experts have questioned whether the measure violates Article 300A of the Constitution, which protects the right to property. Others argue that it may conflict with Article 30, which guarantees minorities the right to establish and administer their own educational institutions.

The strongest criticism has come from organisations working among Dalits, Adivasis, Muslims, and Christians. Many of these groups run schools, clinics, hostels, and welfare centres in areas where government services are limited.

In tribal and rural regions, faith-based and independent organisations often provide primary healthcare, education, and livelihood support. Critics say that allowing the state to take control of these institutions threatens the social infrastructure on which vulnerable communities depend.

Minority organisations have also expressed concern that the Bill could weaken their institutional autonomy. Christian and Muslim groups argue that education, healthcare, and social services are central to their community life. Although the government has said the Bill does not interfere with religious practice, opponents say taking control of the institutions run by these groups would undermine their ability to function independently.

Another contentious provision allows seized assets to be redirected for “public purposes”. The government says this is necessary to prevent the misuse of foreign-funded property. Critics, however, argue that the phrase is vague and could allow schools, hospitals, or community centres established by minority trusts to be handed over to government departments or politically aligned organisations.

Rights groups have also warned of a broader “chilling effect” on India’s nonprofit sector.

According to official figures, foreign contributions to India reached nearly ₹27,000 crore in 2022-23. Organisations say the new law could discourage long-term investment in public welfare projects, as donors may be unwilling to build schools or hospitals if there is a risk the state could later take them over.

Government ministers have defended the Bill as a measure to improve transparency and prevent misuse of foreign funds. They say organisations acting in the national interest have nothing to fear.

But critics argue that the law could fundamentally alter the relationship between the state and civil society by making NGOs more dependent, more cautious, and less willing to speak out.