For the first time, the Union Ministry of Home Affairs under Amit Shah has declared grounds for refusing the approval required by the Foreign Contribution Regulation Act (FCRA) to receive foreign funding. These include engaging in religious conversions and anti-development activities, maliciously encouraging protests, and having ties to extremist organizations. Director (FCRA) K Sanjayan released an official notification from the ministry on 8th November which was uploaded on an official website on 11th November.
“The Ministry has received representation from some of the associations stating that reasons for denying their application are unclear. The matter has been examined and is decided to disseminate the consolidated reasons for the denial of renewal/registration applications for the benefit of applicant associations. Accordingly, an illustrative list of reasons for denial of renewal/registration applications is tabulated,” it conveyed.
The press release then listed the reasons and stated that the license would not be granted if ” no activity has been carried out by the association or it has become defunct or the claimed activities could not be corroborated during field inquiry or field inquiry has revealed that no reasonable activity for the welfare of society has been undertaken by the association during the last 2-3 years” under section 12(4)(b).
The same shall be denied in line with section 12(4)(e) read with 12(4)(1)(iii) if there is an ongoing criminal prosecution against any office bearer, member, or key functionary, or if any of these individuals has been convicted under any currently enacted laws. The notice informed, “Prosecution for any offence is pending against any office bearer(s)/ member(s)/ key functionary(ies) or any of the office bearer(s)/ member(s)/ key functionary(ies) is/are convicted under any law for the time being in force.”
“Not responding to clarifications sought or the association has not provided the requisite information/document(s) despite the opportunity given. Concealment of facts/information by the association in its application form or the application form is incomplete,” were also presented as the reasons under section 16(2) read with section 12(4)(1)(iii) in case of renewal and 12(1) and (2) read with 12(4)(f) (iii) in case of registration along with section 16(2) read with 16(1) for renewal and section 12(2) for registration.
The appointment of fake members was also included as a reason under section 12(4)(a)(i). It highlighted, “Any of the office bearer(s)/ member(s)/ key functionary(ies) is/are not found at the given address provided by the association in its form FC-3C/FC-3A or field inquiry has revealed that office bearer(s)/ member(s) / key functionary(ies) is/are fictitious / benami / only for namesake,” would lead to the rejection of the license.
“The association does not exist at the given address provided by the association in its form FC-3C/FC-3A,” under section 12(4)(a)(i) was given as another reason. “The certificate of registration of the association has already been cancelled. Therefore, as per section 14(3) of FCRA, 2010, the association is not eligible to accept FC for three years from the date of cancellation,” under section 16 read with section 14(3) was also added in the notification.
“Association has diverted foreign contributions for carrying out anti-development activities or inciting malicious protests. Field inquiry has revealed the likelihood of personal gain by the association or by the office bearers or the likelihood of utilization of FC for undesirable activities. Jon Field inquiry has revealed adverse inputs against the association (e.g., involvement in anti-developmental activities, inciting protests with malicious intentions, linkage with terrorist organisations / anti-national organisations etc.),” according to section 12(4)(a)(vi), 12(4)(f)(ii), 12(4)(f)(iii), section 12(4)(a)(vi) read with section 12(4)(f)(iii) and section 12(4)(a)(vi), 12(4)(f)(ii) read with 12(4)(f)(iii) were stated as more reasons for the refusal.
“Association or its office bearer(s)/ member(s)/ key functionary(ies) having linkage(s) with radical/terrorist entities. Field agency has reported adverse inputs against the association and acceptance of FC is likely to affect social/religious harmony or the association is involved in induced/forceful religious conversion/ proselytization or the association or its office bearers have a linkage with radical organisations.” under section 12(4)(a)(vi), 12(4)(f)(ii), 12(4)(1)(iii) with section 12(4)(a)(vi) and 12(4)(f)(vi) read with 12(4)(f)(iii) were pointed out as the following conditions for the denial of FCRA license by the home ministry.
The release then underlined more reasons under “Exclusive to Renewal applications (Form FC-3C)” and stated, “During the last 05 years the association has not utilized any FC for projects as per aims and objectives of the association. The association has not uploaded the Annual Returns of any of the previous 6 Financial Years (Non-filing of annual returns is a violation of section 18 of FCRA 2010 read with rule 17 of FCRR, 2011),” under section 12(4)(b) and section 12(4)(a)(vii).
The notice then included further grounds under section 12(4)(a)(vii) along with examples. It mentioned, “Association has violated any one or more of the provision(s) of the act or rules. (Some examples of violations are:- (a) Admin expenses of more than 20% (b) discrepancy in annual returns (c) non-compliance of mandatory intimations (d) not utilizing contribution for the purpose for which the contribution has been received (e) not intimated change of office bearer/member/key functionaries as mandated in Rule 17A (f) not uploaded bank statements, income and expenditure account, receipts and payment account and balance sheet along with annual return in Form FC-4 (g) not intimated any change in details such name/address, nature, bank account, the opening of new account as mandated in Rule 17A (h) transferred FC to a bank account which is a non-FCRA account (i) transferred non-FC fund in FCRA account (mixing of FC and non-FC) (j) the association has utilized FC for speculative activities (k) the association has transferred FC to another association in contravention of Section 7 of FCRA, 2010 etc.).”
The ministry under the “Exclusive to Registration applications (Form FC-3A)” headline informed, “Association has not fulfilled the criteria of spending a minimum amount of Rs 15 Lakhs of its core activities for benefits of society during the last three financial years. The association is not in existence for three years,” both keeping with section 12(2) read with Rule 9.
The notice has also informed, “Applications for the grant of registration and renewal received from the applicants are processed under the provisions of the Foreign Contribution (Regulation) Act, 2010 (FCRA, 2010 on “the Act”) and/or the Foreign Contribution (Regulation) Rules, 2011 (“FCRR, 2011” or “the Rules”). Applications fulfilling the eligibility criteria including the conditions of registration under section 12(4) of the act are granted a certificate of registration. Applications not fulfilling the eligibility criteria including conditions of registration are denied. An E-mail message from the FCRA portal is sent to the E-mail ID of the association whose application is denied, conveying the reason for the denial of application duly mentioning the relevant provision(s) of the act. Applicant associations are also intimated through SMS.”
As of right now, 16,023 NGOs hold FCRA licenses, while 20,711 organizations have had their licenses revoked, according to MHA statistics. Since 2020, the centre has increased its scrutiny of NGOs under the FCRA. At least 335 NGOs and associations that were registered or had been given prior approval under the FCRA were inspected or audited by the MHA’s FCRA unit between 2019 and 2022 to see whether or not they were adhering to the regulations governing foreign funding.
The licences of the Rajiv Gandhi Foundation (RGF) and Rajiv Gandhi Charitable Trust (RGCT) in 2022 were also cancelled based on breaking the law. In September 2020, the FCRA was revised to prohibit foreign funding for public workers and to require Aadhaar Cards for all NGOs’ office-bearers. Additionally, organizations were prohibited by the modified statute from using more than 20% of foreign contributions for administrative purposes. Previously, the threshold was 50%.
