FCRA tweaked to boost CSR spend
The government has proposed an amendment with retrospective effect that will allow political parties to accept donations from overseas companies whose ownership of Indian entities is within the foreign investment limits prescribed for the sector.
- The amendments were proposed by the Finance Minister in the Finance Bill as part of the Union Budget of 2016-17. The amendment is retrospective and will come into effect from 2010, when the FCRA was introduced.
Background:
Until now, the Foreign
Contribution (Regulation) Act, 2010, or FCRA, banned political parties from
receiving funds from any foreign source. The original law defines “foreign
source” to include any company with foreign investment of above 50%.
About the Foreign Contribution
Regulation Act (FCRA): Quick look
The Ministry of Home Affairs is
mandated to administer the Foreign Contribution (Regulation) Act, 2010, for
regulating the receipt and utilization of foreign contribution by the
associations/NGOs.
- Expeditious action is taken as and when adverse inputs of violations of provisions of the Act are received against any association. The NGOs/Civil Societies registered/given Prior Permission under Foreign Contribution (Regulation) Act, 2010 are required to follow the provisions of Act, Rules and instructions issued in this regard from time to time.
- The Government receives inputs from various security agencies, including Intelligence Bureau, from time to time, about the violations of FCRA, however, action is initiated against the alleged violators only after due scrutiny and following due process as prescribed in the said Act.
- If any NGOs/Civil Societies violate any of the provisions of the Act and Rules, then only, action is initiated as per provisions of Foreign Contribution (Regulation) Act, 2010. Actions include compounding of offence, putting in prior reference category, suspensions of registration, freezing of accounts, cancellation of registration, prosecution etc.
The following persons are
prohibited from accepting foreign contribution :
- Candidate for election.
- Correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper.
- Judge, government servant or employee of any entity controlled or owned by the government.
- Member of any Legislature.
- Political party or its office bearers.
- Organisations of a political nature as may be specified.
- Associations or company engaged in the production or broadcast of audio news or audiovisual news or current affairs programmes through any electronic mode or form or any other mode of mass communication.
However, foreign contribution
can be accepted by the above-mentioned persons in the following specific situation:
- By way of remuneration for himself or for any group of persons working under him.
- By way of payment in the ordinary course of business transacted in or outside India or in the course of international trade or commerce.
- As agent of a foreign source in relation to any transaction made by such foreign source with the Central or State Government.
- By way of gift or presentation as a member of any Indian delegation. However, the gift or present should be accepted in accordance with the rules made by the Central Government.
- From his relative.
- By way of any scholarship, stipend or any payment of like nature.
