The Narendra Modi-led NDA government has been arguing that it is only trying to lay down a broader and robust framework around foreign contributions. Perhaps it seeks to eliminate the discretionary element in the whole process so that a sense of clarity is available in receiving and using foreign contributions. But the opposition is viewing the bill with suspicion. Not surprisingly, the noise around the bill has reached a crescendo. What does the bill contain?
The Foreign Contribution (Regulation) Act, introduced in 1976, was ostensibly intended to regulate the acceptance and utilisation of foreign contributions. Parliament enacted the Foreign Contribution (Regulation) Act, 2010, replacing the earlier legislation with a modern regulatory framework. That was done in the wake of increasing complexity in cross border transactions. Since then, the framework has seen amendments in 2016, 2018 and 2020. The Foreign Contribution (Regulation) Amendment Bill, 2026 and the notified FCRA (Amendment) Rules, 2026 are the latest in the series.
What does the Bill say?
The Bill requires organisations receiving foreign contributions to register with the appropriate authority and specify the purpose and state or Union Territory where the funds will be used. Existing associations will have one year to indicate the purposes and locations they wish to retain. NGOs renewing their FCRA registration must show that they used at least Rs 10 lakh in foreign contributions over the previous two years, ensuring only active organisations retain registrations. Annual returns must include project- and activity-wise utilisation details, the organisation’s website and social media information, and the full identity of the ultimate foreign donor even when funds are routed through intermediaries.
Section 15 has provided for vesting of foreign contribution assets since 2010, but lacked a detailed framework for taking custody, managing or disposing of them. The 2026 bill fills this gap. When registration ends, an organisation’s assets temporarily vest with the designated authority. If registration is restored, the assets and unused funds are returned. If not restored within the prescribed period, the assets vest permanently with the authority. The assets are then used for public purposes, with sale proceeds credited to the Consolidated Fund of India. “No official benefits personally,” the press note says. It adds that the change was needed because provisional vesting cannot continue indefinitely. The bill also provides judicial oversight – organisations can seek a revision within 90 days and appeal to the District Judge.
Clarification still needs to be sought
Questions have been raised behind the motive. The Modi government, however, claims that it is only trying to usher in transparency and that the funds received from overseas are spent for the designated purpose. The dynamics of geopolitics is undergoing a series of metamorphoses. Against this backdrop, the compulsion to have tighter oversight of the funds arriving from abroad cannot be wished away. The onus is on the government to carry everybody along in this process.