On March 25, the Central government introduced the Foreign Contribution Regulation (Amendment) Bill, 2026, in the Lok Sabha, one of several Bills introduced in the latter half of the Budget session. While almost all of them had some issue or the other, the FCRA (Amendment) Bill became particularly controversial because of its provisions enabling over-centralisation of certain powers, discretionary executive overreach, and potential for attacks on minority-run institutions.

There was no prior consultation on the Bill before its introduction in the Lok Sabha. On April 2, opposition MPs held a protest in Parliament demanding that  the Bill be rescinded, with a banner that said: “Stop targeting NGOs and institutions”.

While the proposed amendment has raised the hackles of organisations that depend on foreign funding, political parties see it as giving unfettered powers to the Central government. That is understandably a bone of contention in a polity already marked by what opposition-ruled States see as undermining of the federal structure.

Many Christian organisations in Kerala and elsewhere cried foul. The furore resulted in the Bill being put on hold and Parliamentary Affairs Minister Kiren Rijiju was obliged to reassure minority organisations that their apprehensions were unfounded. He maintained that the Bill was designed to protect national security and did not target any religion. But the opposition was aggressive on what had become an election issue and pushed the BJP on the back foot.

Even Prime Minister Narendra Modi, while campaigning in Kerala, reached out to the Christian community stating that his government would not go against their interests. He accused the Left Democratic Front and the United Democratic Front of spreading lies about the proposed changes in the FCRA.

The Bill’s Statement of Objects and Reasons claimed that the proposed amendment was designed to fill in operational and legal gaps in the management of foreign contributions and the assets created out of them, especially in cases where FCRA registrations had been cancelled, surrendered, or had ceased to exist. The existing law provides for the “vesting of assets” but lacks a framework for supervision, management, and disposal of such assets, leading to “administrative uncertainty and scope for misuse”.

FCRA 2010 regulates the acceptance and use of foreign funds by individuals and companies. Contributions may be in the form of a donation or transfer of any currency, securities or article from a foreign source—citizens of foreign countries, foreign governments, their agencies, trusts, societies, and companies. Entities wishing to receive such contributions must register with the government.

The Act also enjoins persons who manage certain kinds of cultural, religious, social, educational, or economic programmes to register with the Central government. From time to time, entities and individuals who hold such registration for receiving foreign funds are required to renew their registration. The Central government retains the power to cancel registration on certain grounds. In the event of such cancellation, or surrender of the registration, the assets revert to an authority set up under the Act.

The law was the brainchild of the United Progressive Alliance (UPA) government. It was, however, under the National Democratic Alliance government led by Narendra Modi that the registrations of several NGOs were cancelled, on specious grounds, in several rounds starting in 2016. 

How the proposed amendment would centralise powers

According to a brief by the non-profit think tank PRS Legislative Research, the proposed amendment had provisions requiring organisations to apply for renewal of registration from time to time; registration would lapse in the event of a late application or rejection of the renewal plea. 

The proposed amendment seeks to widen the powers of the authority that gets control of assets in the event of cancellation/surrender of a registration. The amendment incorporates a new chapter, Chapter III A, that provides for a designated authority notified by the Central government to provisionally manage, supervise, and deal with such assets.

Assets, fully or partly created and acquired through foreign contribution, would be managed and utilised by this new authority. The foreign contribution would be utilised for the management of assets by the authority. Upon issuance of a fresh registration or its renewal or restoration, the unutilised contribution would be returned. But the assets and funds would be vested permanently with the authority if the renewal, restoration, or obtaining of fresh registration was not done within a specified period; and also if the entity holding a valid registration ceased to exist or was inoperative or defunct.

The amendment proposed that if a certificate of registration ceases to exist, no person can receive or utilise foreign contribution until it is renewed. All assets vested in the designated authority would be used for public purposes. The assets could also be transferred to ministries, departments or agencies of Central and State governments. Assets may also be disposed of through sale; unutilised foreign contribution and proceeds emanating from asset disposal would be credited to the Consolidated Fund of India.

The designated authority would also have the right to sell any immovable property vested with it and issue a certificate of sale with full ownership rights to the transferee, who would be able to have the property registered in their name. It would not matter that the new transferee did not hold the original title as the sale would be effected by the authority appointed by the Central government. Even a decree by a civil court, a tribunal or any authority ordering the transfer, attachment or seizure of such property would not be considered unless so specified by the Act. No court or any other authority will be able to intervene.

The 2010 Act prohibited certain persons from accepting foreign contribution—  election candidates, political parties, judges, legislators, and news publishers, among others. In subsequent amendments, associations and companies engaged in activities related to the production or broadcast of news or current affairs programmes were also prohibited from accepting foreign contribution. The latest Bill extends the prohibition to individuals engaged in such activities. The only relief it offers is a reduction in the term of imprisonment for contravening the Act, from five years to one year. Any person aggrieved by the order of the designated authority has the right to appeal in the court of a District Judge within 90 days.   

Under the proposed legislation, entities would be able to deal with assets created out of foreign contribution after securing approval from the Central government. The Bill seeks to replace positions like office-bearers and directors with “key functionaries”, thus expanding the circle of people who could be made answerable. 

What is at stake

It is more than semantics that is the issue here. A close perusal of the Bill reveals that the designated authority has been vested with extraordinary powers going beyond the mere management, utilisation, and transfer of foreign contributions and assets derived from them. The Bill gives the authority, or a person designated by it, powers to demand unhindered access to the book of accounts, records including electronic ones, premises and properties for inspection, inventory, and valuation. All the key functionaries of the organisation whose assets and contributions have been vested with the authority would be required to produce all books, accounts, documents, securities, movable assets, and hand over possession or control of bank accounts, safe deposits and lockers “as maybe required by the Authority”. They would not be able to part with or conceal any foreign contribution or asset without the approval of the designated authority. They would be expected to carry on their activities under the supervision of the authority and comply with all directions issued from time to time.

In sum, the Bill arrogates full powers to this Central government authority to arbitrate over the functions of entities or persons who are recipients of foreign contribution and assets. The authority would function as a civil court with all the attendant powers.

Right to exempt

The Bill gives the Central government full rights to exempt any person or category of persons from the provisions. Whoever accepts, utilises or assists or any person, political party or organisation in accepting or utilising any foreign currency from a foreign source shall be imprisoned for up to a year. A classic example of executive overreach is that in order to tide over difficulties in giving effect to the provisions, the Bill grants the Central government the right to amend any provision with a mere notification in the official Gazette.

The Bill’s Statement of Objects and Reasons mentions that FCRA 2010 was amended in 2016, 2018, and 2020, and that these amendments were meant to ensure that inflows of foreign contribution and foreign hospitality do not adversely affect national interest, public order, or national security. Around 16,000 organisations were registered under the Act and received around Rs.22,000 crore annually.

An attack on civil society, minorities, and NGOs

Political parties from the INDIA bloc were scathing in their critique. The CPI(M) said that while it “acknowledged the state’s prerogative to regulate the flow of foreign contributions to ensure transparency and national security”, the Bill “crossed the threshold from reasonable regulation to excessive control”. In a letter to the Prime Minister the party’s general secretary, M.A. Baby, urged him to rescind the Bill.

He referred to the Home Ministry’s portal to say that 20,711 FCRA registrations had been cancelled and that the Act was used “not as a tool for regulation but as a political weapon to silence dissent and harass organisations that questioned the government’s policies”. He pointed out the lack of consultation and attacks on federalism. The discretionary powers of the designated authority “threatened the very existence of civil society” and had an inimical impact on minority institutions, he said.

The blanket provisions had not factored in locally sourced assets, he wrote. In many cases, he said, assets were a creation of both domestic and foreign funds. Granting such powers to the executive without judicial oversight also went beyond the scope of regulatory oversight. There were federal issues as well. State governments had to take permission of the Central government before prosecuting an FCRA violator in the State. Imposing a central veto on the investigative role of the State governments was antithetical to federalism, said the CPI(M) general secretary.

The Congress called the Bill “not a reform but an attack on minorities, civil societies, NGOs and people who are working for the poor”. Just like the Waqf (Amendment) Bill created fear among Muslims, the FCRA Bill would create fear among Christians, the party tweeted from its official handle. Congress leader K.C. Venugopal wrote to Modi expressing anguish. Tamil Nadu Chief Minister M.K. Stalin also wrote to Modi demanding the withdrawal of the Bill.  

Each amendment to the FCRA has been more stringent than the last, and the latest Bill outdoes them all. Critics point out that PM Cares Fund is not open to scrutiny at all. Managed by a trust that has the Prime Minister as ex-officio chair and several ministers as trustees, the fund is not a public entity subject to auditing by the Comptroller and Auditor General. It has 100 per cent tax exemption and is open to all kinds of donations including foreign funding through debit and credit cards and wire transfers. It has been exempted from all FCRA provisions, whereas NGOs and others with much smaller corpus face routine harassment over sources of funding, domestic or foreign.

The Bill, if passed, would lay the legal framework for the specious usurping of funds and assets raised legitimately, all in the name of national security. State Assembly elections may well have been the reason for holding back the Bill, especially with the BJP trying to secure a foothold in the southern States. The government was pretty confident that it could ramrod any legislation in Parliament. Still, like the farm laws that the government was compelled to rescind, the FCRA Bill is on hold. But for how long?

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