New Delhi, November 5, 2022: The Ministry of Home Affairs (MHA) has cancelled the Foreign Contribution (Regulation) Act license of Rajiv Gandhi Foundation (RGF) and Rajiv Gandhi Charitable Trust (RGCT). A notice has been sent to the officials of RGF and RGCT, organizations linked to the Congress party, in this regard for allegedly violating the foreign funding law.
Congress on the other hand has counter-attacked the move by the MHA and the Narendra Modi-led government saying that this has been done to defame them and just to divert the attention of the public from the day-to-day issues in the country. Furthermore, Sonia Gandhi has commented that she will take all necessary legal actions against this order.
As per the MHA, the decision has been taken after investigations carried out by the inter-ministerial committee (formed by the MHA) since July 2020 has found irregularities in the foreign funding and the misuse of the funds in areas that are not in the national interest. BJP President JP Nadda has alleged that RGF had received a funding of $300,000 from People’s Republic of China and the Chinese Embassy which was used to conduct studies on free trade in India. These studies, the BJP alleges, are not in national interest.
He has further pointed out that the foundation owned by the Congress party has also received funds from the fugitive businessman Mehul Choksi, while the Prime Minister’s relief funds were also diverted to Gandhi family trust.
For a matter of fact, the foundation’s FCRA license was reportedly renewed for shorter periods of 3-6 months since 2020. The Rajiv Gandhi Foundation was set up in 1991 and had been working in areas including education, healthcare, women and children development, science and technology, disability, etc.
While the issue has come to the fore, let us understand FCRA.
What’s FCRA and what do the rules say?
FCRA regulates the foreign donations/funding and ensures that these funds don’t harm the internal security of the nation. FCRA was first enacted in 1976 with some amendments in 2010 and 2015 to adopt new measures pertaining to foreign funding. In 2015, the MHA notified some changes in the rules according to which NGOs have to give a declaration while receiving foreign funding and ensure that the funds won’t be utilized in any area that can disrupt the communal harmony within the country and affect its relations with any foreign nation along with ensuring that the funds won’t affect the integrity and sovereignty of India.
Besides this, filing income tax returns is mandatory. The NGO are also needed to operate bank accounts with nationalized or private banks (with core banking facility) that can be accessed by security agencies in real time.
Who is eligible for FCRA and what’s the mandate under it?
Registering with FCRA is mandatory for all organizations, trusts, foundations, groups, NGOs and associations that intend to receive foreign funding. The funds can be utilized in educational, cultural, social, religious and economic purposes. The registration is valid for a period of 5 years initially, which can be renewed provided all norms are complied with.
Who can’t receive foreign funding?
As per the rules, government officials, judges, members of legislature and political parties, a candidate for election, correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper, employee of any corporation or any other body controlled or owned by the government, organization of a political nature, and media professionals are prohibited from receiving foreign funding.
When is FCRA registration cancelled or suspended?
The MHA and the central government can suspend or cancel the FCRA registration of an NGO (Initially for 180 days) basis multiple reasons including adverse inputs against its functioning, in public interest or violation of the Act. Until a decision is taken against the NGO, it can’t receive any foreign funding or utilize more than 25% of the funds available in the associated bank account without prior permission of the MHA. Once the FCRA registration is cancelled, the association/NGO is not eligible to re-register for 3 years from the date of cancellation. However, the cancellation by the MHA/central government can be challenged in the High Court.
FCRA license cancellation - what has happened in the past?
It’s not the first time that the FCRA license of a foundation has been cancelled. In 2020 also the FCRA licenses of around 13 NGOs were suspended and bank accounts frozen against similar backdrop. As per the MHA data, from 2011 to 2022, the FCRA licenses of around 20,664 organizations have been cancelled on account of diversion or misuse of the foreign funds or non-submission of the annual returns.
At present, there are over 50,000 FCRA registered organizations in the country.
