Current Affairs

Govt notifies new rules for NGO

Published on Nov-24-2020

Govt notifies new rules, makes it tougher for NGOs to get foreign funds- 13th Nov- Indian Express

(GS 2, Governance)

In News

·         The centre has recently further tightened rules for organisations seeking foreign funding.

New Rules

·         Eligibility

o    The new rules state that any organisation seeking registration under the Foreign Contribution (Regulation) Act (FCRA) must have operated for at least 3 years.

o    It must have spent minimum amount of Rs 15 lakh on its core activities for the benefit of society during the last 3 financial years.

·         Prior Permission

o    Any organisation seeking prior permission for receiving a “specific amount from a specific donor for carrying out specific activities or projects” shall “submit a specific commitment letter from the donor.

o    The letter shall indicate the amount of foreign contribution and the purpose for which it is proposed to be given.

·         Contributions Above 1 Crore

o    The Centre has said that if the value of foreign contribution is over Rs 1 crore, it may be given in instalments.

o    But, provided the second and subsequent instalment shall be released after submission of proof of utilisation.

o    Proof of utilisation must show 75% of the foreign contribution received in the previous instalment.

o    There will be field inquiry of the utilisation of foreign contribution.

·         Political organisations

o    The rules for declaring an organisation as a “political organisation” have been relaxed.

o    Student, farmer, worker and youth organisations are being exempted unless they participate in “active politics or party politics”.

o    Political organisations can’t receive foreign funds.

·         Stringent Norms

o    The amendments have made the FCRA, 2010 more stringent.

o    It has prohibited transfer of funds from one NGO to another.

o    It has decreased administrative expenses through foreign funds from 50% to 20 %.

o    Aadhaar has been made mandatory for registration.

o    This gives the government powers to stop utilisation of foreign funds through a “summary enquiry”.



  • The new rules are a follow-up on the amendments to the FCRA that the Centre pushed through in the last session of Parliament.
  • In the newly notified rules, the Centre has made an insertion in Rule 9.
  • It deals with obtaining registration or prior permission to receive foreign funds
  • It makes the process more cumbersome for NGOs.

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