Background:

 

  • An NGO has petitioned the Delhi High Court to be exempted from the Union Home Ministry’s March 31 deadline for opening an FCRA account with an SBI branch in New Delhi.

What exactly is the problem:

  • The Foreign Contribution Regulation Act (FCRA) was amended in 2020, making it mandatory for non-governmental organizations (NGOs) to open a bank account in Delhi.
  • However, many organizations who are unable to acquire foreign money have been hampered as a result of this.
  • The new laws are affecting many NGOs, as they are preventing philanthropic activities during the pandemic.

Amendment to the Foreign Contribution (Regulation) Regulations, 2020:

  • It aims to make it illegal for ‘public servants’ to receive any foreign funding.
  • It proposes that NGOs utilize foreign funding to cover administrative expenditures by reducing their utilization of foreign funds from 50% to 20%.
  • Its goal is to “prevent any transfer of foreign contribution to any association or person.”
  • It suggests that all office-bearers, directors, and other important functionaries of NGOs or groups qualified to accept foreign funding be required to have Aadhaar cards.
  • It aims to give the federal government the power to hold a short inquiry and order organisations that have received FCRA permission to “not use the unutilized foreign contribution or receive the remaining share of foreign contribution.”
  • Also, the use of foreign monies for administrative purposes should be limited. 
  • This would have an impact on research and advocacy groups that rely on the funds to cover administrative expenditures.
  • Source  The Hindu 

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