FOREIGN CONTRIBUTION (REGULATION) ACT, 2010.

• Recently, the Union Government has put restrictions on funding for 10 international Non-Governmental Organisations (NGO’s) working on Child Rights, Climate Change and environmental projects.
• In February 2021, the Ministry of Home Affairs (MHA) issued new regulating guidelines to banks under Foreign Contribution (Regulation) Act, 2010.

Important points:

• The Reserve Bank of India had previously asked for several foreign organisations to be put on the Prior Reference Category (PRC) list.
• It implies that as and when the foreign donor wants to transfer the money to some recipient association in India, the same needs prior clearance from the Ministry of Home Affairs.
• Over 80 international agencies are on the list.

Reasons for Curb:

• It was stated that dozens of NGOs were indulged in outright misappropriation or misutilisation of foreign contributions.
• Even doubling the inflow of foreign contribution between the years 2010 and 2019, many recipients have not utilised the fund for the purpose for which they were registered or granted under FCRA Act.
• It has also led the central government to cancel certificates of registration of more than 19,000 recipient organisations during the period between 2011 and 2019.

Way Forward

• Excessive regulation on foreign contribution may affect working of the NGOs which are helpful in implementing government schemes at the grassroots. They fill the gaps, where the government fails to do their jobs.
• The regulation should not hamper sharing of resources across national boundaries essential to the functioning of a global community, and should not be discouraged unless there is reason to believe the funds are being used to aid illegal activities.

SOURCE: THE HINDU,THE ECONOMIC TIMES,MINT