According to new amendment to the Foreign Contribution (Regulation) Act, 2010 (FCRA) rules notified on June 22 by the Ministry of Home Affairs, foreign funding for NGOs and other organisations will be limited to 105 specified religious, cultural, economic, educational, and social activities, with a clear prohibition on any initiatives involving religious conversion.

Non-governmental organisations that seek foreign funding are required to register under one of five approved categories; social, economic, educational, cultural, or religious, but this is the first instance in which separate activity lists have been specified for NGOs within each category.

They should mandatorily disclose the nature of their activities,

• the geographic reach of their programmes

• details of their websites

• social media profiles

• publications

In addition, they must pay separate fees for every category and for each State and Union Territory in which they operate, replacing the earlier system of a single fee for all FCRA registrants.

Starting now new registrations must adhere to the stricter norms, and existing registrations are required to align with these changes within the next year. Any breach will attract a minimum penalty of ₹1 lakh, as stated in a separate order issued by the Ministry of Home Affairs (MHA).

It may only choose activities listed in a Schedule introduced under the FCRA Rules, which specifies 105 categories eligible to receive foreign funding—

16 to religious purposes,

18 to cultural,

19 to economic,

22 to educational

30 to social activities.

The Ministry of Home Affairs oversees all foreign contributions under the Foreign Contribution (Regulation) Act, 2010.

Prior amendments to the Rules only mandated NGOs to submit an undertaking stating that their receipt of foreign funds would not threaten India’s sovereignty and integrity, harm friendly relations with foreign nations, or disturb communal harmony.

For religious purposes, an association may obtain approval to receive foreign contributions for activities such as constructing, renovating, and maintaining places of worship; providing religious education to promote devotional music; fostering interfaith dialogue; developing, maintaining, and managing burial and cremation grounds; and safeguarding sacred relics, shrines, and archaeological religious heritage.

Key Functionaries

The revised Rules expand the definition of an NGO’s “key functionary” beyond office-bearers and directors to encompass trustees, partners, the Karta or head of a Hindu Undivided Family, members of the governing body, and any other individuals who control or manage the organisation.

Under the new Rules, associations that have foreign nationals (excluding persons of Indian origin) as key functionaries will generally be deemed ineligible for registration or prior permission, unless the Central government grants specific approval.

NGOs must also indicate whether their organization or any of their key officials issued any publications during the year, such as books, magazines, or newspaper articles.

Fines for FCRA violations

The MHA issued another order outlining penalties for FCRA violations, including excessive administrative expenditure, speculative investments, misappropriation of funds, unauthorised receipt or use of foreign contributions, and the utilisation of funds for purposes or in States/UTs that have not been approved.

It further states that spending beyond the allowed administrative expense limit or engaging in speculative use of funds will attract fines calculated as a percentage of the amount involved, with a minimum penalty of ₹1 lakh.

Permitted activities with foreign funds

Religious: 16

• Establishment of religious libraries, museums, and archives

• Faith-based counselling centres, de-addiction centres, and social care programmes

• Training in traditional sacred crafts: idol-making

Cultural: 18

• Archiving and digitisation of films, radio programmes, theatre scripts, and photographs

• Preservation of scientific and knowledge heritage (astronomy, mathematics, metallurgy manuscripts, traditional technologies)

• Establishment of literary academies support to writers, poets, and translators, and organisation of book fairs

Economic: 19

• Job placement services, employment exchanges, and market linkages for trained youth

• Microfinance, microcredit, and community savings institutions for poor households

• Green economy livelihoods: solar technicians, e-waste handlers, recycling units