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Understanding FCRA 2010: Key Issues and Challenges for Individuals and Organizations

The Foreign Contribution Regulation Act (FCRA) 2010 significantly impacts individuals and organizations in India, particularly concerning foreign funding. This discussion explores the key issues and challenges faced by eligible individuals under FCRA, including the distinction between scholarships and fellowships, prior permissions required for obtaining funds, and the implications for political activities. Organizations are subject to registration and must comply with stringent regulations regarding their foreign contributions and administrative costs. This guide provides clarity on the complexities of FCRA compliance.

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Understanding FCRA 2010: Key Issues and Challenges for Individuals and Organizations

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  1. FCRA 2010: Issues And Challenges

  2. Individuals • Individuals now covered by FCRA • Scholarships exempt • Need FCRA registration / permission for: • Program Activities • Non-academic Fellowships

  3. Fellowship • Difference between scholarship and fellowship • Prior-permission for fellowship • Consultancy fees?

  4. Electronic Media • Prohibition on media expanded to include: • Organization producing or broadcasting news / current affairs programs through any electronic mode (audio/ video) • Use of Internet as a mode of transmission • Other modes of mass communication • Individuals not covered, except as owners of the organization

  5. Panchayats • Panchayats defined as legislature • Not eligible to receive foreign funds • Members / candidates • Can not accept foreign funds • Need permission for foreign hospitality etc. • Form FC-9

  6. Political Activities • Wider coverage of organizational forms • Wider definition of ‘political activity’ • …steps towards advancement of larger socio-economic or political interests of the organisation • …habitually engages itself in , …political action like bandh, hartal, rastaroko, rail roko…in support of public causes

  7. Administrative Expenses • Capped at 50% of total foreign contribution received in a year • Includes: • Salaries, Fees, Travel • Rent and other Overheads • Excludes: • Salary of field researchers, Doctors, teachers etc. • Direct program expenses(?)

  8. Speculative Investments • Restrictive definition of ‘speculative activities’ • …has an element of risk of appreciation/ depreciation…linked to market forces, incl. investment in mutual funds… • …any scheme that promise high returns like investment in chits, land etc….not directly linked with declared aims…

  9. Interests of the State • Registration cannot be granted if it might affect: • the security, strategic, scientific or economic interest of the State • Not defined in law • Might include: • Nuclear energy • Work in border states • Internal unrest • Defense expenditure / strategy • Displacement issues

  10. Secondary Grants • Secondary transfer of FC to non-FCRA NGOs: • 10% of total FC received • Prior-permission needed • Secondary transfer of FC to FCRA NGOs • Validate FCRA registration of receiver

  11. Renewal See page 110 of AccountAble Handbook: FCRA 2010 for more. • Renewal required every five years • Old registrations valid till 30-Apr-2016 • Apply 6-12 months prior to expiry • Delayed application allowed • Registration frozen in the meanwhile • Can lapse if no activity for two years • Renewal of FCRA Registration: FC-5

  12. Further Reading AccountAble 35: FCRA Fellowships AccountAble 84: ‘Foreign Source’ in FCRA 2010 AccountAble 96: Introduction to FCRA 2010

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