Religious conversion exempted from foreign-funded activities; Centre tightens FCRA rules

Religious conversion excluded from activities carried out with foreign funds; Centre tightens FCRA rules

The central government has tightened the Foreign Contribution Regulation Rules (FCRA) as part of making the activities of NGOs receiving foreign funds more transparent. The organizations will now have to disclose their purpose of operation and the information in which states they operate. According to the new amendments, restrictions have been imposed on granting permission to organizations involving foreign nationals and the limit on the use of funds has been raised.

These amendments have been made to the FCRA rules of 2011 with the aim of ensuring proper accountability in the receipt and use of foreign funds by NGOs and associations in India.

According to a gazette notification issued by the Union Home Ministry on Monday, NGOs receiving foreign funds will have to select their purpose of operation from a specified list provided by the government. They will also have to accurately record the states or union territories in which they intend to operate. Although the new rules allow various religious activities, forced religious conversion using foreign funds has been completely banned.

The Home Ministry has clarified that organizations whose principal officers are non-Indian citizens will not normally be granted registration or prior permission under the FCRA. However, the provision for the Central Government to grant permission in such cases through a special order has been retained.

The amendment has broadened the definition of the term 'principal officer' in entities other than individuals. It includes directors of companies, partners in partnerships, trustees, 'Kartha' of a Hindu undivided family and any other person having controlling power in the management.

Key requirements in brief

Registration process: NGOs applying for foreign funds must select the specific objectives and scope of work from the list (religious, cultural, economic, educational, social) prescribed by the government. This information will be recorded in the certificate issued to the organizations.

Ban on religious activities: While construction, renovation of places of worship, religious education and propagation of devotional songs are permitted, the rules state that no religious conversion efforts are allowed in the protection of indigenous and tribal customs, satsangs and meditations.

Advice for those who registered earlier: All associations registered before 2026 have been given one year to inform the government about the exact objectives and states they wish to maintain. An additional fee of Rs 300 will be charged for each additional state or objective added to the application.

Minimum fund utilization: A new law has been introduced to prevent inactive NGOs from holding a license. They must have spent at least Rs 10 lakh from foreign donations on their activities in the last two financial years. Only then will the registration be renewed.

Release of funds: Organizations receiving funds in phases will be allowed to release the next installment only if they utilize at least 75 percent of the amount received earlier. The government will conduct field inspections to verify this.

Social media information: While applying for registration or renewal, the social media account details of the organizations must be submitted. Also, if the money comes through any other agencies, the real source of it must be disclosed. A detailed activity report and financial statement must be submitted along with the annual returns.

Organizations falling under the purview of FCRA are prohibited from producing or broadcasting news or current affairs. Therefore, it is also necessary to clarify in the application whether they or their key office bearers have published any books or articles. In short, the government is putting the field of work of NGOs and the use of foreign funds under stricter surveillance through this new amendment.