The Foreign Contribution (Regulation) Amendment Bill, 2020 is a legislative Act that amends the Foreign Contribution (Regulation) Act, 2010. The original legislation, the FCRA, 1976, was created to regulate foreign contributions and hospitality to prevent activities detrimental to the national interest. The FCRA, 2010 replaced the 1976 Act. The 2020 Bill was introduced in the Lok Sabha on September 20, 2020, and passed by the Lok Sabha on September 21, 2020. Its objective is to make the law more stringent and enhance transparency in the utilization of foreign funds.
The Act works by introducing several key restrictions and compliance mechanisms. It amends Section 7 of the FCRA, 2010 to impose a complete prohibition on the transfer of foreign contribution by the original recipient entity to any other person. This significantly impacts sub-grantee structures. The Act also expands the list of persons prohibited from accepting foreign contributions to include 'public servants', as defined under Section 21 of the Indian Penal Code, 1860. Furthermore, it reduces the maximum limit for using foreign contribution towards administrative expenses from 50% to 20%. For registration or renewal, the Act requires the provision of the Aadhaar number of all key functionaries. The amendments also mandate that foreign contribution must be received in a specific account at the State Bank of India (SBI), Sansad Marg, New Delhi. The Ministry of Home Affairs (MHA) administers the Act. The amendments were challenged and subsequently upheld by the Supreme Court.