General Studies Paper 3 (Internal Security)
Question:- 205. The purpose of Foreign Contribution Regulation Act is to establish transparency and accountability, not to violate freedom of association. Elaborate the statement. Answer in 250 words.
Mar 03, 2023


The Foreign Contribution Regulation Act aims to regulate the acceptance and utilization of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit acceptance and utilization of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected therewith or incidental thereto.

It is implemented by the Ministry of Home Affairs. The FCRA was enacted during the Emergency in 1976 amid apprehensions that foreign powers were interfering in India’s affairs by pumping money into the country through independent organisations. Individuals are permitted to accept foreign contributions without permission of MHA provided the contribution is less than Rs. 25,000.




The Act is essential to establish transparency and accountability as

  1. 1. It ensures that foreign contributions to individuals and associations are used in a way so that they function in a manner consistent with the values of a sovereign democratic republic.
  2. 2. It prevents foreign powers from interfering in India’s affairs.
  3. 3. It helps in safeguarding national security interests by preventing foreign entities from funding activities that could be detrimental to India’s security.
  4. 4. It ensures that foreign contributions are used for social and economic development in India.
  5. 5. FCRA also helps control black money and its round tripping, terror funding etc. It also helps bring greater transparency in the working of NGOs making them accountable to the people.




 However, many a times, the issues regarding violation of freedom of association have been raised especially in cases of Amnesty International, Greenpeace, Rajiv Gandhi Foundation etc. The following factors stand against freedom of association

  1. 1. The government’s discretionary powers to cancel registrations or freeze accounts of NGOs have been supposedly misused in some cases to target NGOs critical of the government, leading to accusations of political interference.
  2. 2. The registration and renewal process under the FCRA can take a long time which delays their work and impact their ability to receive funding. The FCRA registration process can be time-consuming and requires extensive documentation, while the rules on the utilization of funds are also strict.
  3. 3. There is a lack of clarity on the compliance requirements for foreign corporations and foundations operating in India leading to concerns about the transparency of their funding activities and potential influence on Indian civil society.
  4. 4. There is often ambiguity in the interpretation of the FCRA, leading to NGOs being exploited by authorities to target NGOs and curtail their activities.
  5. 5. It causes the organizations to compromise their independence, stiffling their internal right to choose its actions and methodologies.



While the FCRA has undergone amendments, the challenges in its implementation remain, such as the difficulty in balancing the need for transparency and accountability with the need to protect the autonomy of civil society organizations.

Nonetheless, it is essential to continue working towards effective implementation of the FCRA to prevent misuse of foreign funds and ensure the transparency and accountability of NGOs in India.