Tuesday, August 9, 2022

SC rules in favour of amendments to provisions of the FCRA

The Supreme Court on Friday ruled in favour of the amendments to the provisions of the Foreign Contribution (Regulation) Act, 2020. The apex court was hearing a petition challenging the constitutional validity of the amendments to the FCRA. The top court observed that foreign donations have the ability to manipulate the country’s socio-economic structure and political scenario. The court said, “For, foreign contribution can have a material impact in the matter of socio-economic structure and polity of the country. Foreign aid can create the presence of a foreign contributor and influence the policies of the country. It may tend to influence or impose political ideology.”

Noting that foreign donations may influence domestic affairs of the country, the three-judge bench hearing the matter said that foreign contribution should be at a minimal level. The bench stated, ” Such being the expanse of the effect of foreign contribution coupled with the tenet of constitutional morality of the nation, the presence/inflow of foreign contribution in the country ought to be at the minimum level, if not completely eschewed.”

The amendments to the FCRA impose several new conditions on the receipt and use of funds by NGOs, besides making it mandatory for the foreign contribution to be received only in an account designated as FCRA account in the State Bank of India. The court said in its order, “The amended provision is not to completely prohibit inflow of foreign contribution but is a regulatory measure to permit acceptance by registered persons or persons having prior permission to do so with condition that they must themselves utilise the entire contribution including for administrative expenses within the limits.”

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