This news article delves into the state-wise distribution of FCRA associations, shedding light on regional disparities and concentrations.
NEW DELHI (India CSR): India is a mosaic of cultures, languages, and communities. The country also reflects a vibrant landscape of Foreign Contribution Regulation Act (FCRA) associations. These entities, registered under the FCRA, play a pivotal role in the country’s socio-economic development, and also channeling foreign contributions to various sectors.
What are FCRA Associations?
FCRA associations are non-governmental organizations (NGOs), societies, and charitable institutions. These organizations receive foreign contributions to run and implement developmental, educational, social, or cultural activities in India. Governed by the FCRA, 2010, these entities contribute significantly to the welfare and development of Indian society. The diversity in the number of FCRA associations across states offers insights into regional developmental dynamics, societal engagement, and the global interest in India’s developmental sectors.
Q: What is the purpose of FCRA, 2010?
Answer: The FCRA, 2010, was created by the Parliament in India. Its main goal is to control how certain individuals, associations, or companies receive and use foreign support or hospitality. It seeks to prevent the use of foreign contributions for activities that might harm national interests. Additionally, it addresses related matters.
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State-Wise Breakdown: A Closer Look
The distribution of FCRA associations across India reveals a varied landscape, with some states hosting a significantly higher number of these entities than others. This section analyzes the state-wise distribution, highlighting notable patterns and concentrations.
The state-wise distribution of FCRA associations in India reflects a complex interplay of factors including regional development priorities, the presence of civil society organizations, and the level of international engagement. Southern states, with their higher numbers, indicate a robust framework for NGO activities and foreign contributions. In contrast, other regions show varying degrees of engagement, highlighting the need for balanced development and support across the country.
1. Southern Dominance and Northern Exposure
Tamil Nadu leads the chart with a staggering 6,675 FCRA associations, underscoring the state’s active engagement in developmental activities with international collaboration.
Following closely is Maharashtra, with 5,322 associations, reflecting its status as a hub for NGOs and social initiatives. Karnataka and Kerala also feature prominently, with 3,782 and 3,080 associations respectively, indicating a strong southern presence in the FCRA landscape.
2. Northern and Central Perspectives
In contrast, northern and central India show a different pattern. Uttar Pradesh and West Bengal, despite their large populations, host 3,461 and 4,212 associations respectively, indicating significant engagement yet not matching the southern states.
States like Bihar and Madhya Pradesh, with 2,149 and 1,115 associations, reflect a moderate presence, pointing towards varying levels of international collaboration in developmental projects.
3. The Northeastern Scenario
The northeastern states present a mixed bag, with Manipur leading with 985 associations, signifying a high level of NGO activity relative to its size. Other states like Assam and Meghalaya show moderate numbers, indicating the presence of active community development efforts supported by foreign contributions.
4. Union Territories and Smaller States
The Union Territories and smaller states like Delhi (2,997), Chandigarh (101), and Andaman & Nicobar Islands (25) show diverse numbers, with Delhi standing out due to its political significance and the concentration of international NGOs.
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State wise Breakup of all types of FCRA Associations
State | Total |
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Andaman & Nicobar Islands | 25 |
Andhra Pradesh | 4230 |
Arunachal Pradesh | 91 |
Assam | 590 |
Bihar | 2149 |
Chandigarh | 101 |
Chhattisgarh | 352 |
Dadra & Nagar Haveli | 16 |
Daman and Diu | 3 |
Delhi | 2997 |
Goa | 198 |
Gujarat | 2375 |
Haryana | 386 |
Himachal Pradesh | 256 |
Jammu & Kashmir | 225 |
Jharkhand | 857 |
Karnataka | 3782 |
Kerala | 3080 |
Madhya Pradesh | 1115 |
Maharashtra | 5322 |
Manipur | 985 |
Meghalaya | 206 |
Mizoram | 76 |
Nagaland | 263 |
Orissa | 2720 |
Pondicherry | 139 |
Punjab | 364 |
Rajasthan | 1084 |
Sikkim | 48 |
Tamil Nadu | 6675 |
Telangana | 2281 |
Tripura | 77 |
Uttar Pradesh | 3461 |
Uttarakhand | 615 |
West Bengal | 4212 |
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Analyzing FCRA Violations and Their Impact on NGOs in India
Introduction to Recent FCRA Violations
Last week marked a significant development when the Central Bureau of Investigation (CBI) registered a case against Harsh Mander, a well-known human rights activist, and his NGO, the Centre for Equity Studies (CES). The case involves alleged violations of the Foreign Contribution (Regulation) Act (FCRA). Based on a complaint from the Union Home Ministry, the CBI’s FIR outlined that CES had made unauthorized transfers from its FCRA account to individuals, a move considered outside the scope of allowable expenses under the Act.
A Pattern of Stringent Actions
This incident isn’t isolated. In recent times, the Indian government has taken strict measures against several NGOs for purported FCRA infringements. Notable organizations like the Centre for Policy Research (CPR), World Vision India, Oxfam India, and the news portal NewsClick have faced actions ranging from cancellation of FCRA registrations to CBI investigations. These steps underscore the government’s intent to closely monitor and regulate the flow of foreign funds into the country, emphasizing the need for NGOs to adhere strictly to FCRA guidelines to avoid being deemed detrimental to national interests.
The Trend of Licence Cancellations
An interesting pattern emerges when looking at the cancellation of FCRA licenses over the years. Significant spikes in cancellations occurred in 2012, 2015, 2017, and 2019, with 2015 witnessing a dramatic surge of over 10,000 cancellations. It’s important to note, however, that not all cancellations stemmed from violations. Many were administrative adjustments to eliminate redundant registrations for the same organization. Despite these massive cancellations, the requirement for FCRA registration remains, with the Act stipulating a five-year renewal period to maintain active status.
State-Wise Impact of Cancellations
Tamil Nadu has experienced the highest number of FCRA licence cancellations, with a notable number of licences also expiring within the state. Despite this, Tamil Nadu still boasts a high number of active FCRA licences, leading the country. Other states like Maharashtra, Andhra Pradesh, Uttar Pradesh, and West Bengal also saw significant cancellations. A closer look reveals that Uttar Pradesh, followed by Bihar and several other states, has a high cancellation rate relative to the total licences issued, indicating a broader regulatory and compliance challenge across the country.
Focus of Active FCRA Licences
The active organisations under FCRA primarily engage in educational and social services, with a substantial portion represented by religious NGOs, particularly those identified as Christian organisations. This diversity highlights the wide range of activities foreign contributions support, from social welfare and education to religious endeavors.
Foreign Contributions by State
In terms of foreign contributions, Delhi, Karnataka, and Tamil Nadu are the top recipients, indicating the significant role of foreign funds in supporting various initiatives within these regions. Delhi, in particular, received the highest amount, followed by Karnataka and Tamil Nadu, underscoring the critical financial support these contributions provide to NGOs in executing their missions and projects.
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Top Ten States with the Highest Number of FCRA Associations in India
India’s engagement with foreign contributions through the Foreign Contribution Regulation Act (FCRA) showcases a vibrant landscape of non-governmental organizations (NGOs), societies, and charitable trusts. These entities play a crucial role in driving the nation’s socio-economic development by channeling foreign contributions into various developmental, educational, social, or cultural activities. A closer look at the state-wise distribution of FCRA associations reveals significant disparities, highlighting regions with a pronounced presence of these organizations.
Below, we unveil the top ten states that lead the country in hosting the highest number of FCRA associations, reflecting their active participation in global collaborative efforts for community development and welfare.
1. Tamil Nadu: A Leader in NGO Activities
Tamil Nadu stands at the forefront with an impressive tally of 6,675 FCRA associations. This southern state’s leading position underscores its vibrant civil society sector and its significant engagement with international partners.
2. Maharashtra: A Hub of Social Initiatives
With 5,322 associations, Maharashtra secures the second spot, reflecting its status as a central hub for a multitude of social initiatives and NGOs, driven by both its urban centers and widespread rural engagements.
3. Karnataka: Progressive Collaboration
Karnataka, with its capital Bengaluru often considered the nonprofit sector’s hub, ranks third with 3,782 associations. The state’s progressive outlook fosters a conducive environment for international collaboration in developmental projects.
4. Kerala: Rich in Cultural and Social Engagements
Kerala’s active involvement in cultural and social sectors is mirrored in its 3,080 FCRA associations. The state’s global diaspora and commitment to social welfare significantly contribute to its high ranking.
5. West Bengal: Diverse Contributions
West Bengal, with its rich cultural heritage and diverse social challenges, hosts 4,212 associations. Its strategic location and historical significance make it a key player in international NGO activities.
6. Andhra Pradesh: Active Engagement in Development
Andhra Pradesh showcases its dedication to development and welfare through 4,230 associations. The state’s focus on rural development and social empowerment is evident in its substantial number of FCRA registrations.
7. Uttar Pradesh: A Crucial Player in Social Welfare
Uttar Pradesh, one of India’s most populous states, has 3,461 FCRA associations. The state’s vast needs and active civil society make it a crucial player in leveraging foreign contributions for development.
8. Telangana: Emerging Strong in Social Development
Telangana, since its formation, has shown significant engagement in social development, with 2,281 associations. Its focus on technology-driven solutions and social innovation marks its emerging strength.
9. Delhi: The Political and NGO Hub
Delhi, India’s capital, is home to 2,997 associations. Its status as a political and NGO hub attracts numerous organizations focused on policy advocacy, human rights, and educational initiatives.
10. Gujarat: Fostering Development and Innovation
Gujarat, with 2,375 associations, rounds off the top ten. Known for its entrepreneurial spirit, the state also shows a strong commitment to social welfare and sustainable development through international collaboration.
Here’s a table summarizing the top ten Indian states with the most FCRA associations, highlighting their significant role in leveraging international contributions for development and welfare projects:
Rank | State | Description |
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1 | Tamil Nadu | Leads with the highest number of FCRA associations, indicating active international engagement. |
2 | Maharashtra | Known for its vibrant NGO sector, stands second in leveraging foreign contributions. |
3 | Karnataka | Third place, with Bengaluru as a hub for NGOs and international development collaboration. |
4 | West Bengal | Fourth, with a rich cultural heritage and diverse development needs attracting foreign funds. |
5 | Andhra Pradesh | Focuses on rural development, ranking fifth in receiving international support. |
6 | Uttar Pradesh | Sixth, addressing vast developmental challenges through a strong network of FCRA associations. |
7 | Telangana | Seventh, showcasing emerging focus on technology and social innovation with international ties. |
8 | Delhi | The national capital is eighth, acting as a center for policy advocacy and educational initiatives. |
9 | Kerala | Ninth, known for its high development indices and effective use of international partnerships. |
10 | Gujarat | Completes the top ten, where entrepreneurship and innovation attract foreign contributions. |
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Analytical Report: Trends in Annual Returns Filed by FCRA Associations
This report examines the trends in annual returns filed by FCRA (Foreign Contribution Regulation Act) associations over the years, from 2006-2007 to 2022-2023. The filing of annual returns is a critical component of compliance for organizations receiving foreign contributions, providing transparency and accountability in their operations.
Overview of Filing Trends
The data reveals a fluctuating trend in the number of annual returns filed over the years, with notable increases and decreases observed. Here’s a closer look:
Peak Filing Period: The highest number of filings was observed in the block year 2013-2014, with a total of 25,233 returns filed. This period marks a peak in compliance activities among FCRA associations.
Recent Decrease in Filings: There has been a noticeable decline in the number of filings from the peak in 2013-2014 to 16,808 in 2022-2023. This decline suggests a decrease in either the number of active associations or their compliance with filing requirements.
Early Years: Starting from 2006-2007, there was a gradual increase in the number of filings, reaching a plateau in the early 2010s. This increase could be attributed to the growing number of associations and heightened awareness about compliance requirements.
Analyzing the Fluctuations
Factors Leading to Peak: The peak in filings around 2013-2014 could be attributed to several factors, including increased scrutiny by regulatory bodies, heightened awareness among associations regarding the importance of compliance, and possibly a rise in the number of associations registered under FCRA.
Reasons for Decline: The recent decline in annual return filings might be due to stricter compliance mechanisms, the cancellation of non-compliant associations, or a general decrease in foreign contributions necessitating registration under FCRA.
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Salient Features of FCRA, 2010 Comes into Effect from May 1, 2011
The Foreign Contribution (Regulation) Act, 2010 has come into effect from May 1, 2011. The Ministry of Home Affairs in India has issued the necessary Gazette Notification vide S.O. 999 (E) dated the 29th April, 2011 in this regard.
The Ministry of Home Affairs has also issued a Gazette Notification vide G.S.R. 349 (E) dated the 29th April, 2011 notifying the Foreign Contribution (Regulation) Rules, 2011 made under section 48 of FCRA, 2010. The FCR Rules, 2011 have come into force simultaneously with FCRA, 2010.
Salient Features of the Act
Any association granted prior permission or registered with the Central Government under Section 6 or under the repealed FCRA, 1976, shall be deemed to have been granted prior permission or registered, as the case may be, under FCRA, 2010 and such registration shall be valid for a period of five years from the date on which the new Act has come into force.
While the provisions of the repealed FCRA, 1976 have generally been retained, the FCRA, 2010 is an improvement over the repealed Act as more stringent provisions have been made in order to prevent misutilisation of the foreign contribution received by the associations.
Any organisation of a political nature and any association or company engaged in the production and broadcast of audio or audio visual news or current affairs programme have been placed in the category prohibited to accept foreign contribution.
A new provision has been introduced to the effect that no person who receives foreign contribution as per provisions of this Act, shall transfer to other person unless that person is also authorized to receive foreign contribution as per rules made by the Central Government.
Another new provision has been made to the effect that foreign contribution shall be utilized for the purpose for which it has been received and such contribution can be used for administrative expenses up to 50% of such contribution received in a financial year. However, administrative expenses exceeding fifty per cent of the contribution to be defrayed with the prior approval of the Central Government.
New provisions have been made for suspension as well as cancellation of registration granted for violation of the provisions of the Act. Such provisions did not exist in the repealed Act.
New provision has also been made for management of foreign contribution and assets created out of such contribution of persons whose certificates have been cancelled.
Under the repealed Act, there was no time limit regarding the validity of registration certificate granted to the associations etc. for accepting foreign contribution. FCRA, 2010 provides that the certificate granted shall be valid for a period of five years and the prior permission shall be valid for the specific purpose or specific amount of foreign contribution for which permission was granted. Further, every person who has been granted a certificate shall renew it within six months before the expiry of the period of certificate.
No funds other than foreign contribution shall be deposited in the FC account to be separately maintained by the associations etc. Every bank shall report to such authority, as may be prescribed, the amount of foreign remittance received, sources and manner and other particulars.
Provision has been made for inspection of accounts if the registered person or person to whom prior permission has been granted fails to furnish or the intimation given is not in accordance with law.
A new provision has been introduced to the effect that the assets of any person who has become defunct shall be disposed of in such manner as may be, specified by the Central Government.
A new provision has been introduced to the effect that any person, who knowingly gives false intimation and seeks prior permission or registration by means of fraud, false representation or concealment of material fact, shall, on conviction by Court, would be liable to imprisonment for a term which may extend to six months or fine or with both.
Any person contravening the provisions of the Act shall be punishable with imprisonment for a term which may extend to five years or with fine or with both.
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Salient Features of the Rules – FCRA, 2010
Guidelines for declaration of an organisation to be of a political nature, not being a political party have been prescribed.
Activities to be treated as speculative activities have been defined.
Expenditure constituting ‘Administrative expenses’ has been clearly defined.
Modalities for submission of application for obtaining registration or prior permission to receive foreign contribution have been given in detail in the Rules and Forms for filing the applications.
The applications for obtaining registration or prior permission shall have to be made electronically on-line, and shall have to be followed by forwarding the hard copy of the on-line application, duly signed, together with the required documents within thirty days of the submission of the on-line application, failing which the request of the person shall be deemed to have ceased.
Any person whose request has ceased shall be able to prefer a fresh on-line application only after six months from the date of cessation of the previous application.
No person would be permitted to prefer a second application for registration or prior permission within a period of six months after submitting an application either for the grant of prior permission for the same project or for registration.
A new provision has been made for submission application fee. The fee for obtaining registration or prior permission would be Rs. 2000/- and Rs. 1000/- respectively.
Applications made for registration or prior permission under the repealed FCRA, 1976 but not disposed of before the date of commencement of these rules shall be deemed to be an application for registration or prior permission, as the case may be, under the new Rules, subject to the condition that the applicant furnishes the prescribed fees for such registration or prior permission, as the case may be.
Every person who has been granted registration or prior permission shall maintain a separate set of accounts and records, exclusively, for the foreign contribution received and utilised.
Every certificate of registration issued to a person shall be liable to be renewed after the expiry of five years from the date of its issue on proper application and application for its renewal shall have to be made in the prescribed form accompanied by a fee of Rs.500/- six months before the date of expiry of the certificate of registration. A person implementing an ongoing multi-year project shall apply for renewal twelve months before the date of expiry of the certificate of registration.
In case no application for renewal of registration is received or such application is not accompanied by the requisite fee, the validity of the certificate of registration of such person shall be deemed to have ceased from the date of completion of the period of five years from the date of the grant of registration. If the validity of the certificate of registration of a person has ceased in accordance with the provisions of these rules, a fresh request for the grant of a certificate of registration may be made by the person to the Central Government as per the provisions of the Rules.
In case a person who has been granted a certificate of registration or prior permission receives foreign contribution in excess of one crore rupees, or equivalent thereto, in a financial year, he/it shall place the summary data on receipts and utilisation of the foreign contribution pertaining to the year of receipt as well as for one year thereafter in the public domain. Besides, the Central Government shall also display or upload the summary data of such persons on its website for information of the general public.
In case the certificate of registration is suspended under the relevant provisions the Act, up to twenty-five per cent of the unutilised amount may be spent, with the prior approval of the Central Government, for the declared aims and objects for which the foreign contribution was received. The remaining seventy-five per cent of the unutilised foreign contribution shall be utilised only after revocation of suspension of the certificate of registration.
The amount of foreign contribution lying unutilised in the exclusive foreign contribution bank account of a person whose certificate of registration has been cancelled shall vest with the banking authority concerned till the Central Government issues further directions in the matter.
If a person whose certificate of registration has been cancelled transfers/has transferred the foreign contribution to any other person, the provisions of sub-rule (1) of this rule shall apply to the person to whom the fund has been transferred.
Every bank shall send a report to the Central Government within thirty days of any transaction in respect of receipt of foreign contribution by any person who is required to obtain a certificate of registration or prior permission under the Act, but who was not granted such certificate or prior permission as on the date of receipt of such remittance. The report shall contain the details regarding name and address of the donor, name and address of the recipient, account number, name of the Bank and Branch, amount of foreign contribution (in foreign currency as well as Indian Rupees), date of receipt, manner of receipt of foreign contribution (cash/cheque/electronic transfer etc.).
The bank shall also send a report containing the above details to the Central Government within thirty days from the date of such last transaction in respect of receipt of any foreign contribution in excess of one crore rupees or equivalent thereto in a single transaction or in transactions within a duration of thirty days, by any person, whether registered or not under the Act.
Every person who receives foreign contribution under the Act shall submit a report, duly certified by a chartered accountant, in the prescribed Form, accompanied by an income and expenditure statement, receipt and payment account, and balance sheet for every financial year beginning on the 1st day of April within nine months of the closure of the financial year, to the Secretary to the Government of India, Ministry of Home Affairs, New Delhi. The annual return in the prescribed Form shall reflect the foreign contribution received in the exclusive bank account and include the details in respect of the funds transferred to other bank accounts for utilisation. If the foreign contribution relates to articles or foreign securities, the intimation shall be submitted in the prescribed Forms.
Every such return in shall also be accompanied by a copy of a statement of account from the bank where the exclusive foreign contribution account is maintained by the person, duly certified by an officer of such bank. The accounting statements referred to above shall be preserved by the person for a period of six years. A ‘NIL’ report shall be furnished even if no foreign contribution is received during a financial year.
Foreign contribution received by a candidate for election, referred to in section 21, shall be furnished in the prescribed Form within forty-five days from the date on which he is duly nominated as a candidate for election.
An application for revision of an order passed by the competent authority under the Act shall be made to the Secretary, Ministry of Home Affairs, Government of India, New Delhi on a plain paper. It shall be accompanied by a fee of Rs.1000/-
An application for the compounding of an offence may be made to the Secretary, Ministry of Home Affairs, on a plain paper and shall be accompanied by a fee of Rs.1000/-.
The Central Bureau of Investigation or any other Government investigating agency that conducts any investigation under the Act shall furnish reports to the Central Government, on a quarterly basis, indicating the status of each case that was entrusted to it, including information regarding the case number, date of registration, date of filing charge sheet, court before which it has been filed, progress of trial, date of judgment and the conclusion of each case.
Any information or intimation about political or speculative activities of a person shall be furnished to the Secretary to the Government of India in the Ministry of Home Affairs, New Delhi. Such information or intimation shall be sent by registered post.
Any person intending to transfer the foreign contribution may make an application to the Central Government in the prescribed Form. The Central Government may permit the transfer in respect of a person who has been granted the certificate of registration or prior permission under, in case the recipient person has not been proceeded against under any provision of the Act. Any transfer of foreign contribution shall be reflected in the prescribed returns by the transferor and the recipient.
In case the foreign contribution is proposed to be transferred to a person who has not been granted a certificate of registration or prior permission by the Central Government, the person concerned may apply for permission to the Central Government to transfer a part of the foreign contribution, not exceeding ten per cent, of the total value of the foreign contribution received. The application shall be countersigned by the District Magistrate having jurisdiction in the place where the transferred funds are sought to be utilised. The District Magistrate concerned shall take an appropriate decision in the matter within sixty days of the receipt of such request from the person. The donor shall not transfer any foreign contribution until the Central Government has approved the transfer.
The Foreign Contribution (Regulation) Act, 2010 (42 of 2010) dated the 26th September, 2010 was notified in The Gazette of India – Extraordinary – Part II – Section I dated the 27th September, 2010. However, the Act was to come into force on such date as the Central Government may, by notification in the Official Gazette appoint. Consequently, the earlier Act, viz., the Foreign Contribution (Regulation) Act, 1976 has also been repealed.
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What is a Foreign Contribution?
The Foreign Contribution (Regulation) Act, 2010 (FCRA), outlines “foreign contribution” in a comprehensive manner to regulate and monitor the acceptance and utilization of foreign funds by individuals, associations, or companies within India. According to Section 2(1)(h) of the FCRA, 2010, a foreign contribution encompasses:
Donations, Deliveries, or Transfers: This includes any article provided by a foreign source, except for personal gifts under a specified market value set by the Central Government.
Currency: It covers all forms of currency, whether Indian or foreign.
Securities: Defined under the Securities Contracts (Regulation) Act, 1956, and includes foreign securities as per the Foreign Exchange Management Act,1999.
Additional Clarifications
Deemed Foreign Contribution: Any donation, delivery, or transfer received from a foreign source, directly or indirectly, is also considered a foreign contribution.
Accrued Interest and Income: Interest or other income derived from the deposited foreign contribution is deemed as a foreign contribution.
Exclusions: Amounts received as fees (including educational fees from foreign students) or as payment for goods and services in the normal course of business, trade, or commerce, as well as contributions towards such fees or payments, are not considered foreign contributions.
Who Can Receive Foreign Contributions?
The term “person” in the context of FCRA, 2010, is broad and includes:
- Individuals
- Hindu undivided families
- Associations
- Companies registered under Section 25 of the Companies Act,1956 (now Section 8 of the Companies Act, 2013).
(India CSR)