The Foreign Contribution (Regulation) Amendment Bill, 2020 is a legislative proposal that became the Foreign Contribution (Regulation) Amendment Act, 2020, which further amends the existing Foreign Contribution (Regulation) Act, 2010 (FCRA). The original FCRA, which replaced a 1976 law, was enacted to regulate the acceptance and utilisation of foreign contributions and hospitality by individuals, associations, or companies, and to prohibit their use for activities detrimental to the national interest. The 2020 Amendment was introduced to strengthen the compliance mechanism, enhance transparency, and increase accountability in the receipt and utilisation of foreign funds.
The Amendment Act, which received Presidential Assent on September 28, 2020, introduced several key changes to the FCRA, 2010. Section 3(1)(c) of the principal Act was amended to expand the list of persons prohibited from receiving foreign contributions to include "public servants," as defined under Section 21 of the Indian Penal Code, 1860. A major change was the substitution of Section 7, which now imposes a complete prohibition on the transfer of foreign contribution by the recipient to any other person, even if the second person is also registered under the FCRA. This replaced the earlier provision that allowed such transfers with prior government approval.
Furthermore, the Amendment reduced the maximum limit for using foreign funds towards administrative expenses from 50% to 20% of the contribution received in the financial year, amending Section 8(1). It also mandated that all foreign contributions must be received only in a designated "FCRA Account" opened at a specified branch of the State Bank of India, New Delhi. For identification, the Bill added a new Section 12A requiring all office bearers, directors, or key functionaries of FCRA entities to provide their Aadhaar number for registration, prior permission, or renewal. The government is empowered to suspend the registration of a person for a period not exceeding 360 days, up from the earlier limit of 180 days.