India’s NGOs at a new funding crossroads, Pg6

Key Highlights:

• The FCRA Amendment Bill, 2026, proposes stricter regulations for foreign funding to Non-Governmental Organizations (NGOs) in India.
• The government expresses concerns over opaque foreign funding, its potential use in politically charged campaigns, and religious conversions.
• The Bill suggests that if an FCRA certificate is cancelled, foreign contributions and assets created from them would temporarily vest in a government-appointed authority.
• Since 2015, FCRA registrations of 22,496 NGOs have been cancelled, leaving about 14,466 active associations eligible for foreign contributions as of September 2026.
• NGOs, particularly Christian organizations, fear the legislation may not be religion-neutral and could adversely affect beneficiaries of their social services.
• Domestic philanthropy, including private giving and Corporate Social Responsibility (CSR) spending, is growing, with private philanthropy projected to reach ₹1.43 lakh crore ($16 billion) in FY 2025.

Detailed Insights:

• The original Foreign Contribution Regulation Act (FCRA) was enacted in 1976, driven by similar apprehensions about foreign interference in India's internal affairs.
• The proposed Bill allows for the recovery of assets by NGOs if their registration is restored within a prescribed period, otherwise, assets could be sold with proceeds going to the Consolidated Fund of India.
• Foreign funding, while a small proportion of overall development funds, is valued by NGOs for its flexibility and fewer restrictions compared to government grants.
• Historically, foreign aid has been credited with bringing new ideas, technologies, and organizational improvements to India's voluntary sector.
• The landscape of foreign aid is changing, with some international donors reducing contributions to India due to their own economic difficulties and India's growing economy.
• The Companies Act, 2013, made CSR spending mandatory for eligible companies, leading to ₹22,563 crore in spending in FY25, a potential alternative funding source for NGOs.
• A vibrant and independent civil society, supported by plural funding sources, is considered essential for a healthy democracy and to prevent the abuse of political power.

Key Concepts Involved:

• Foreign Contribution Regulation Act (FCRA): An Indian law regulating the acceptance and utilization of foreign contributions or hospitality by individuals, associations, or companies.
• FCRA Amendment Bill, 2026: Proposed legislation aiming to further tighten controls on foreign funding to NGOs, including provisions for asset vesting upon registration cancellation.
• Consolidated Fund of India: The primary government account where all revenues received by the government, loans raised, and receipts from loan recoveries are credited.
• Corporate Social Responsibility (CSR): A business approach where companies integrate social and environmental concerns into their business operations and interactions with stakeholders, often mandated by the Companies Act, 2013.