The Financial Contribution (Regulation) Amendment Bill 2020: A Critical Analysis

Abstract

The amendment mainly seeks to streamline FCRA provisions by strengthening compliance mechanism, enhancing transparency and accountability in receipt and utilisation of foreign contribution. The FCR Act, 2010 provides for certain basic compliance requirements like submission of annual returns, maintenance of proper accounts, etc. While the legislative note identifies the necessity towards strengthening the provisions on such basic statutory compliance, the FCR Amendment Act, 2020 fails to address the same. Changes like extended suspension period does very little to achieve the key objects of the amendment. Reducing the limit on utilization of foreign contribution funds towards administrative expenses has the potential to limit the instances of misuse of FC funds, under the guise of administrative expenses. The amendment to Section 3(1)(c) provides express clarity on the prohibition placed on public servants from accepting foreign contribution. This inclusion is a welcoming move in ensuring the autonomy of public servants in discharge of their duty. The bar on transfer of foreign contribution restricts the ability of persons receiving FC from indirectly utilising or diverting the funds towards activities that are detrimental to national interest and those activities which are not within the stated objectives of the organisation. These measures including inquiries prior to renewal of registration are clearly a step towards fortifying the foreign contribution norms.