New Delhi, March 25 A bill brought by the government to amend the FCRA will significantly tighten its oversight of foreign-funded organizations, proposing the creation of a powerful new authority to seize and manage the assets of non-profits that lose their license.
The Foreign Contribution (Regulation) Amendment Bill, 2026, introduced in the Lok Sabha by Minister of State for Home Affairs Nityanand Rai on Wednesday, entails a comprehensive statutory framework for vesting, supervision, management and disposal of foreign contributions and assets through a 'designated authority', including provisional and permanent vesting.
Currently, approximately 16,000 associations are registered under the Foreign Contribution (Regulation) Act (FCRA) and receive around Rs 22,000 crore annually, according to the Bill's statement of objects and reasons.
"Over time, certain operational and legal gaps have been identified, particularly in relation to the management of foreign contributions and assets created therefrom in cases where registration is cancelled, surrendered or otherwise ceases," it said.
The Bill provides for timelines for receipt and utilisation under prior permission; regulates dealing with assets during suspension of registration; provides for cessation of certificate upon expiry, non-renewal or refusal of renewal; rationalises penalties and introduces prior approval of the central government for initiation of investigation.
Countering the opposition's charges that the Bill is "dangerous", Rai asserted that it is "indeed dangerous" for those who engage in forced religious conversion using foreign contributions, as well as for individuals who abuse foreign funding for personal gain.
"The Modi government will not tolerate any misutilisation of foreign funding and will take strong action against such elements," he said.
The Bill also seeks to reduce punishment from five years imprisonment to one year for whoever accepts, or assists any person, political party or organisation in accepting any foreign contribution or any currency or security from a foreign source in contravention of any provision of FCRA.
It aims to tackle the multiplicity of investigations, inconsistency in penalties, absence of timelines for utilisation, lack of express provision for cessation of registration, and ambiguity regarding the treatment of assets during suspension, which have resulted in implementation challenges.
The proposed law also introduces a provision which will allow the certificate, granted under the FCRA to receive foreign funds, to be automatically treated as expired once its validity period ends if the holder fails to apply for renewal on time, submits a renewal application that is later rejected by the government, or does not get the certificate renewed before its expiry date.
"No person whose certificate has ceased to exist shall either receive or utilise the foreign contribution unless the certificate is renewed," the bill states.
In the FCRA, Section 15 provides for vesting of assets, but the absence of a comprehensive framework for supervision, management and disposal of such assets has led to administrative uncertainty and scope for misuse.
Under the proposed law, the government has introduced a new Chapter IIIA to establish a "designated authority" to take provisional or permanent control of assets created from foreign contributions in cases where foreign contribution certificates have been cancelled, surrendered or ceased.
It provides for a comprehensive framework for vesting, supervision, management and disposal of foreign contributions and assets in a 'designated authority', including provisional and permanent vesting.
The foreign contribution and the assets created out of foreign contribution of any person--whose certificate has been cancelled under Section 14; or who has surrendered the certificate under section 14A; or whose certificate has ceased under section 14B or any rules made under this Act -- shall, from the date of such cancellation, surrender or cessation, vest provisionally in the Designated authority in such manner as may be prescribed, the proposed law said.
If an individual fails to obtain a fresh certificate or gets their certificate renewed or restored within the period referred in the law, the foreign contribution and the assets created out of foreign contributions shall thereupon stand permanently vested in the Designated authority, the Bill proposes.
The 'designated authority' shall apply the foreign contribution and the assets "permanently vested" in it for public purposes and may by an order transfer them to any Ministry, Department, authority or agency of the Central Government or of a State Government or any local authority, or dispose of through sale or any other appropriate process, and credit the sale proceeds together with any unutilised foreign contribution to the Consolidated Fund of India, it said.
The Foreign Contribution (Regulation) Act, 2010, enacted on May 1, 2011, regulates the acceptance and utilisation of foreign contributions and foreign hospitality to ensure that such inflows do not adversely affect national interest, public order or national security. The Act has been amended in 2016, 2018 and 2020.
The Foreign Contribution (Regulation) Amendment Bill, 2026, introduced in the Lok Sabha by Minister of State for Home Affairs Nityanand Rai on Wednesday, entails a comprehensive statutory framework for vesting, supervision, management and disposal of foreign contributions and assets through a 'designated authority', including provisional and permanent vesting.
Currently, approximately 16,000 associations are registered under the Foreign Contribution (Regulation) Act (FCRA) and receive around Rs 22,000 crore annually, according to the Bill's statement of objects and reasons.
"Over time, certain operational and legal gaps have been identified, particularly in relation to the management of foreign contributions and assets created therefrom in cases where registration is cancelled, surrendered or otherwise ceases," it said.
The Bill provides for timelines for receipt and utilisation under prior permission; regulates dealing with assets during suspension of registration; provides for cessation of certificate upon expiry, non-renewal or refusal of renewal; rationalises penalties and introduces prior approval of the central government for initiation of investigation.
Countering the opposition's charges that the Bill is "dangerous", Rai asserted that it is "indeed dangerous" for those who engage in forced religious conversion using foreign contributions, as well as for individuals who abuse foreign funding for personal gain.
"The Modi government will not tolerate any misutilisation of foreign funding and will take strong action against such elements," he said.
The Bill also seeks to reduce punishment from five years imprisonment to one year for whoever accepts, or assists any person, political party or organisation in accepting any foreign contribution or any currency or security from a foreign source in contravention of any provision of FCRA.
It aims to tackle the multiplicity of investigations, inconsistency in penalties, absence of timelines for utilisation, lack of express provision for cessation of registration, and ambiguity regarding the treatment of assets during suspension, which have resulted in implementation challenges.
The proposed law also introduces a provision which will allow the certificate, granted under the FCRA to receive foreign funds, to be automatically treated as expired once its validity period ends if the holder fails to apply for renewal on time, submits a renewal application that is later rejected by the government, or does not get the certificate renewed before its expiry date.
"No person whose certificate has ceased to exist shall either receive or utilise the foreign contribution unless the certificate is renewed," the bill states.
In the FCRA, Section 15 provides for vesting of assets, but the absence of a comprehensive framework for supervision, management and disposal of such assets has led to administrative uncertainty and scope for misuse.
Under the proposed law, the government has introduced a new Chapter IIIA to establish a "designated authority" to take provisional or permanent control of assets created from foreign contributions in cases where foreign contribution certificates have been cancelled, surrendered or ceased.
It provides for a comprehensive framework for vesting, supervision, management and disposal of foreign contributions and assets in a 'designated authority', including provisional and permanent vesting.
The foreign contribution and the assets created out of foreign contribution of any person--whose certificate has been cancelled under Section 14; or who has surrendered the certificate under section 14A; or whose certificate has ceased under section 14B or any rules made under this Act -- shall, from the date of such cancellation, surrender or cessation, vest provisionally in the Designated authority in such manner as may be prescribed, the proposed law said.
If an individual fails to obtain a fresh certificate or gets their certificate renewed or restored within the period referred in the law, the foreign contribution and the assets created out of foreign contributions shall thereupon stand permanently vested in the Designated authority, the Bill proposes.
The 'designated authority' shall apply the foreign contribution and the assets "permanently vested" in it for public purposes and may by an order transfer them to any Ministry, Department, authority or agency of the Central Government or of a State Government or any local authority, or dispose of through sale or any other appropriate process, and credit the sale proceeds together with any unutilised foreign contribution to the Consolidated Fund of India, it said.
The Foreign Contribution (Regulation) Act, 2010, enacted on May 1, 2011, regulates the acceptance and utilisation of foreign contributions and foreign hospitality to ensure that such inflows do not adversely affect national interest, public order or national security. The Act has been amended in 2016, 2018 and 2020.
Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
The information provided is for general informational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any securities. Readers are advised to rely on their own assessment and judgment and consult appropriate financial advisers, if required, before taking any investment-related decisions.
