MHA asked Finance Ministry to surrender powers to monitor NGOs

The Home Ministry has asked the Finance Ministry to surrender its powers to monitor non-governmental organisations (NGOs) under the Foreign Exchange Management Act (FEMA). This move is aimed at bringing all NGOs which receive foreign contributions under one umbrella for better monitoring and regulation.

Current practice:

Currently, there are nearly 100 international NGOs and associations which receive foreign funds through their liaison offices and disburse them to NGOs across India. Few international donors are registered under FEMA but not the Foreign Contribution Regulation Act (FCRA), 2010.

• The Home Ministry monitors foreign funds donated to NGOs and organisations through the FCRA. And, FEMA is regulated by the Finance Ministry.
• Many NGOs and foreign donors do not want to register under the FCRA due to its stringent provisions.

Why a common head is necessary?

There are certain NGOs which are registered under FEMA and continue to disburse foreign funds to various associations in India. Since FEMA is regulated by the Finance Ministry, there are many occasions when the Home Ministry is not able to monitor the flow of funds effectively. Hence, these powers should be given to the Home Ministry. This helps in better monitoring and regulation of NGOs.

Background:

The FCRA was brought into force to regulate flow of foreign funds to voluntary organisations with the objective of preventing any possible diversion of such funds to anti-national activities.

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.