FCRA registration deadline may be extended beyond December 31
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Amidst the furore over the Kolkata-based Missionaries of Charity (MOC) facing a temporary bar from receiving foreign funding by newly introduced measures by the Union Ministry of Home Affairs (MHA), reports indicate that the Ministry is likely to extend the December 31 deadline for the registered recipients of foreign contributions to apply for renewal of registration under the Foreign Contribution (Regulation) Act (FCRA).
The registration of thousands of NGOs and associations that were up for renewal in October 2020 reportedly are in the limbo pending the processing by MHA. The registrations are renewed every five years.
According to a senior government official, quoted by the Hindu which carried a report in this regard, only around 5,000 renewal applications have been processed so far. There are 22,762 NGOs which have the mandatory registration under the FCRA.
The Union government has generally been blamed for blocking the receipt of foreign funds by organisations of charity, religious activities and other non-governmental organisations championing various causes including environmental and human rights issues by making regulatory mechanisms more and more restrictive. Many of such measures, brought in through rules and circulars under the FCRA, in addition to the FCRA Amendments in 2020, have been found to contain provisions that allow arbitrary interpretations and make it possible for the government to demand cumbersome documentation.
One such regulation was the provision that the recipient bodies had to primarily receive funds only in a designated FCRA account with the State Bank of India's main branch in Delhi, thus making it easy for the government to summon details about and track transactions. The NGO's are however allowed to hold and operate other accounts in banks elsewhere, but they can receive funds from abroad only through the Delhi SBI account.
Due to COVID-19 and such amendments to the FCRA in 2020 requiring new compliances, many NGOs could not complete the registration process. And the bank account would be activated only after production of an authorisation certificate from the MHA which was delayed, allegedly deliberately in many cases and partly because of under-staffing of the MHA establishment.
Several NGOs had moved court, the Hindu reports, stating that despite fulfilling all requirements to open bank accounts by March 31, the process was not completed at the MHA's end, which hampered their work in the absence of their usual funds from abroad.
The MHA allowed time till September 30 to those bodies with registration expiry date between September 29, 2020 and September 30, 2021 to apply for renewal. The deadline was further extended till December 31. When the applications are not scrutinised in time, those whose appeals are pending suffer due to non-receipt of funds.
That is the reason why MoC, founded by Nobel-Laureate Mother Teresa instructed all its affiliates across the country to stop receiving funds in its 250 bank accounts in different parts of the country and also froze the funds therein, apparently to avoid attracting penal measures for infringements.
During financial year 2020-21, reports the Hindu, the Missionaries of Charity had received over ₹75 crore worth of donations from 347 foreign individuals and 59 institutional donors. It had a balance of ₹103.76 Cr in its FCRA account including 27.3 crore carried forward from the previous year.
In the case of MoC, in addition to the overall delay, and probably to explain its position in the public domain, the MHA clarified on Monday that it refused to renew the FCRA registration of the Missionaries of Charityon December 25, as "some adverse inputs were noticed". Whether such 'inputs' were the government's own evaluations or complaints raised by third parties, is not clear.
The amendments to the FCRA provided for MHA to withhold registration or its renewal, on receipt of such 'inputs' which implied that the association applying for registration risks is subject to arbitrary decisions. However, this matter is likely to come up in the case raised by petitioners in the case pending before the apex court.
As per the amendment in 2020, an association cannot spend more than 20 % of its income for administrative expenses, which earlier was capped at 50 percent, and all office bearers and key functionaries had to use Aadhaar card as proof of identity.
Since 2011 when the Act was re-enacted, 20,664 outfits had lost their registrations for violations such as misuse of foreign contribution, failure to submit annual returns and for diverting foreign funds for other purposes. Currently, there are 22,762 FCRA-registered NGOs.
The MHA is authorised to suspend the registration initially for 180 days, based on findings during inspection of accounts or on receiving any adverse input against the functioning of an association. And in the pendency of a decision, the association is barred from receiving any donation, and even cannot spend more than 25% of its available funds without the permission of MHA.
The MHA can cancel the registration of an organisation which will not be eligible for registration or grant of 'prior permission' for three years from the date of cancellation.
