General Studies Paper 2 (Governance)
Question:- The Foreign Contributions Regulation Act stifles the independent functioning of NGOs. Discuss. Answer in 250 words (15 marks)
Jun 13, 2022

INTRODUCTION: Define NGOs and their importance in Indian governance. Write about the provisions of FCRA wrt NGOs


i) Importance of the regulations

ii) Criticism of the regulations




NGOs are voluntary organizations, that work towards a social cause and social justice. With the support given by the government, NGOs have been accelerating their development activities by taking up specific issues like poverty alleviation, casteism and discrimination, women rights, child labour, rural development, environmental issues etc.
The Foreign Contribution (Regulation) Act, 2010 and rules framed under it (the “FCRA” or “Act”) regulate the receipt and usage of foreign contribution by NGOs in India. It is implemented by the Ministry of Home Affairs, Government of India. The intent of the Act is to prevent use of foreign contribution or foreign hospitality for any activity detrimental to the national interest.

Broadly, the FCRA requires every person or NGO wishing to receive foreign donations to be :
I) registered under the Act,
II) to open a bank account for the receipt of the foreign funds in State Bank of India, Delhi, and to utilize those funds only for the purpose for which they have been received and as stipulated in the Act to file annual returns Need


1.Not many countries can be termed as altruistic donors or observers to India when it comes to geopolitics. Hence, donations to NGO for a particular cause could have different motives – strategic or economic. E.g.. 3 US non-governmental organisations were found to be fuelling protests at the Kudankulam Nuclear Project Site after strained Indo-US relations.

2. NGOs involved in violation of FCRA:- Several pro-climate NGOs are focusing on advocacy against coal in the media- forcing the government to bring down developmental activities through protests. India’s record in complying with the Paris agreement, global pressures are intensifying on India to raise the Nationally Determined Contributions. It is detrimental to the Indian image and poverty reduction plans.

3. Biased data and poor ranking on several Indices: In 2017, the International Labour Organizations’ Global Slavery
Index ranked India 53rd of 167 countries where “modern slavery” was prevalent, and as the country with the highest number of people in force labour. MHA questioned the credibility of the data.

4. Internal Security: A range of organisations which appear to be social organisations are linked to a Maoist cause.

5. Other issues: There are shreds of evidence of money laundering, subversive activities, human trafficking and violation of the other laws by NGOs.


1. Non-Achievement of SDGs and Foreign Aid/ Donations:  The donations to NGOs form a significant chunk of funds for social work which will not be available once they flee.

2. Killing of entire Social Sector: Over-regulation is the evil that kills almost every industry. The regulation should not hamper sharing of resources across national boundaries essential to the functioning of a global community,
and should not be discouraged unless there is reason to believe the funds are being used to aid illegal activities

3. Incompatible with International laws:- United Nations Human Rights Council resolution on protecting Human Rights says that no law should criminalize or delegitimize activities in defense of human rights on account of the origin of funding.

4. Unconstitutional (Violation of Art 19 (1)): as it violates constitutional provisions to respect and protect the rights to freedom of association, expression, and freedom of assembly.

5. Livelihood of workers associated with NGOs will suffer.


Civil society is one of the most important institutions of democracy. However, the government of any country has the right to ask genuine questions around the genuineness of a protest, the objective of money received – is it legal or being laundered etc. Until 2011, there were more than 40,000 NGOs registered under FCRA in India. That number now stands at 16,000.Many NGOs are doing humane service. NGOs are helpful in implementing government schemes at the grassroots. They fill the gaps, where the government fails to do their jobs. We need to draw a distinction between the ones with other motives and the ones which benefit our society.