FCRA: Why Amendment Is a Must

The latest data placed before the Joint Parliamentary Committee examining the Foreign Contribution (Regulation) Act amendment should settle one basic question - does India need stronger regulation of foreign funding? The answer is clearly yes.
This is alarming. We must remember that foreign money is not ordinary domestic charity.
When money originates outside the country and enters Indian society on a large scale, the State has a legitimate responsibility to know who is receiving it, from whom, for what purpose and with what consequences. Transparency cannot be treated as an inconvenience when national interest, public order and social harmony are involved. The data presented by the Ministry of Home Affairs makes the issue even more significant.

Of the Rs 22,974 crore received in 2024-25, about Rs 13,071 crore went towards social activities and Rs 6,933 crore towards education. Around Rs 1,841 crore was classified as being for religious purposes. Of this religious-purpose funding, Christian organisations received Rs 1,345 crore, or more than 73 per cent. Hindu organisations received Rs 328 crore, while Muslim organisations received about Rs 19 crore. This fact iis self-explanatory and does not need any discussion.

The controversy over FCRA has often been reduced to a familiar political argument - that tighter regulation is an attempt to suppress NGOs or target minorities. That argument deserves scrutiny rather than automatic acceptance.

There is another important point. The present FCRA framework has already demonstrated that regulation cannot depend merely on registration. According to the data presented to the JPC, the government has cancelled the registration of 21,983 NGOs, with 91.3 per cent of the cancellations attributed to failure to file annual returns, 7.9 per cent to inactivity and 0.4 per cent to legal violations. This raises a fundamental question: why should an organisation receiving foreign money be allowed to continue operating indefinitely without maintaining strict financial and statutory accountability?

There is an even more revealing figure. Of Rs 35,968 crore in unutilised foreign contribution in 2024-25, Rs 21,140 crore was lying in fixed deposits, Rs 8,394 crore in utilisation accounts and Rs 6,377 crore in designated accounts. Large sums of foreign money sitting unutilised cannot simply be treated as an accounting detail. They require effective oversight. The argument for FCRA reform therefore should not be framed as government versus NGOs. It should be framed as accountability versus opacity.

Third, accountability. Where violations occur, action must be proportionate but certain. A system in which rules exist but enforcement becomes endlessly vulnerable to litigation and procedural ambiguity serves neither the government nor genuine NGOs.

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India has changed dramatically since the original FCRA framework was created. Foreign funding today operates on a scale and through networks that could not have been imagined decades ago. International philanthropy, religious organisations, advocacy networks, think tanks, educational institutions and social-sector organisations operate across borders with unprecedented ease. Money can travel faster than regulation. Influence can travel faster than money. The State therefore has to keep pace.

The answer is not to shut the doors to foreign contributions. The answer is to ensure that foreign money entering India remains transparent, traceable and accountable to Indian law. Nor should the government be apologetic about asserting national interest. Every sovereign country has the right to determine the limits within which foreign money can operate inside its territory. India should be no exception.

The FCRA amendment is therefore not merely another piece of regulatory legislation. It is an opportunity to establish a clearer principle - foreign contribution is a privilege subject to public accountability, not an unrestricted entitlement. The government must ensure that legitimate NGOs are not harassed and genuine charitable work is not obstructed. At the same time, those using foreign funds for activities contrary to Indian law or national interest cannot be permitted to hide behind the larger and legitimate role of civil society.

The latest FCRA figures make one thing clear - the debate can no longer be postponed. The FCRA amendment is a must  not to weaken civil society, but to strengthen accountability in a country where the scale of foreign funding is increasing even as the number of recipient organisations is shrinking.

The FCRA debate, therefore, cannot be reduced to a confrontation between the government and NGOs. The fundamental issue is whether a sovereign country can permit foreign money to enter its social, religious and institutional space without ensuring complete transparency about its source, destination and influence. Foreign contribution is not an unrestricted entitlement; it is a privilege subject to public accountability and the laws of the land.

India needs a regulatory framework that is firm without being arbitrary, transparent without being intrusive and stringent without obstructing genuine social work. The fact that fewer organisations are now receiving larger volumes of foreign funds makes stronger oversight more, not less, necessary. Parliament must therefore revisit and strengthen the FCRA. The choice is not between civil society and the State; it is between accountable foreign funding and unchecked foreign influence. Foreign charity may cross India’s borders. Foreign influence cannot be allowed to cross them unchecked.