FCRA amendment bill to introduce a new authority to manage assets of NGOs that lose licence

A legislation brought by the government to amend the Foreign Contribution (Regulation) Act (FCRA) will significantly tighten its oversight of foreign-funded organisations, proposing the creation of a powerful new authority to seize and manage the assets of non-profits that lose their licence.

The FCRA Bill, 2026, introduced in Lok Sabha by Minister of State for Home Affairs Nityanand Rai on Wednesday, also sought a comprehensive statutory framework for vesting, supervision, management and disposal of foreign contributions and assets through a ‘designated authority’, including provisional and permanent vesting.

At present, approximately 16,000 associations are registered under the Act and receive around ₹22,000 crore annually, the statement said.

According to the statement of objects and reasons, the proposed law seeks to provide timelines for receipt and utilisation under prior permission. It provides for the cessation of the certificate, regulating the handling of assets during suspension, rationalising penalties and requires prior approval of the central government for the initiation of investigation.

‘Abuse’ of foreign funding

Countering the Opposition’s charges that the bill is “dangerous”, Mr. Rai asserted that it is “indeed dangerous” for those who engage in forced religious conversion using foreign contributions, as well as for individuals who abuse foreign funding for personal gain.

“The Modi government will not tolerate any misutilisation of foreign funding and will take strong action against such elements,” he said.

“Over the period, certain operational and legal gaps have been identified, particularly in relation to the management of foreign contributions and assets created therefrom in cases where registration is cancelled, surrendered or otherwise ceases,” the statement of objects and reasons of the bill said.

In the Foreign Contribution (Regulation) Act (FCRA), Section 15 provides for vesting of assets, but the absence of a comprehensive framework for supervision, management and disposal of such assets has led to administrative uncertainty and scope for misuse.

New chapter on ‘established authority’

Under the proposed law, the government has introduced a new Chapter IIIA to establish a “designated authority” to take provisional or permanent control of assets created from foreign contributions in cases where foreign contribution certificates have been cancelled, surrendered or ceased.

It provides for a comprehensive framework for vesting, supervision, management and disposal of foreign contributions and assets in a ‘designated authority’, including provisional and permanent vesting.

The foreign contribution and the assets created out of foreign contribution of any person — whose certificate has been cancelled under Section 14; or who has surrendered the certificate under section 14A; or whose certificate has ceased under section 14B or any rules made under this Act — shall, from the date of such cancellation, surrender or cessation, vest provisionally in the Designated authority in such manner as may be prescribed, the proposed law said.

The Foreign Contribution (Regulation) Act, 2010, enacted on May 1, 2011, regulates the acceptance and utilisation of foreign contributions and foreign hospitality to ensure that such inflows do not adversely affect national interest, public order or national security. The Act has been amended in 2016, 2018 and 2020.

The bill also seeks to tackle the multiplicity of investigations, inconsistency in penalties, absence of timelines for utilisation, lack of express provision for cessation of registration, and ambiguity regarding treatment of assets during suspension have resulted in implementation challenges.

The Bill also seeks to provide timelines for receipt and utilisation under prior permission; regulate dealing with assets during suspension of registration; provide for cessation of certificate upon expiry, non-renewal or refusal of renewal; rationalise penalties and introduce prior approval of the Central Government for initiation of investigation.