Pratidin
Polity and governance21 September 2026The Hindu, Editorial page 6

India's NGOs at a new funding crossroads

A new FCRA Bill proposes powers over assets built with foreign money.

Published 21 September 2026. Written by Pratidin from the reports linked at the end; every fact checked by a separate review before publishing. How we work

An editorial in The Hindu examines the Foreign Contribution (Regulation) Amendment Bill, 2026, which was introduced in the Lok Sabha on 25 March 2026, deferred on 1 April after protests, and referred on 12 August to a 31-member Joint Parliamentary Committee headed by BJP MP Sanjay Jaiswal. The JPC is due to report in the first week of the Winter Session.

The Bill inserts a new Chapter IIIA creating a government-appointed 'designated authority'. If an organisation's FCRA registration is cancelled, surrendered or lapses, its foreign contributions and assets created from them provisionally vest in this authority; if registration is not restored within a set period, they vest permanently and can be transferred to Central or State government bodies, with places of worship to keep their religious character. Appeals lie to a District Judge within 90 days. The Bill also extends the list of persons barred from receiving foreign contributions and requires prior Central approval before any investigation under the Act.

At a JPC meeting reported by The Hindu on 19 September, Opposition members argued that vesting assets without a prior hearing violates the right to property under Article 300A, and raised concerns about institutions such as schools and hospitals built with mixed foreign and domestic funds. The Home Ministry defended the changes on grounds of transparency, accountability and national security, saying the current 'prescribed authority' is only a passive custodian with no procedure to manage or dispose of assets. According to the International Center for Not-for-Profit Law, around 22,000 FCRA registrations have been cancelled since 2010.

Practise this in the app: flashcards, quiz and a timed answer
Prelims

Prelims facts

  • The Foreign Contribution (Regulation) Act, 2010 regulates foreign funding of NGOs and bars it for political activities.
  • The 2020 amendment banned transfer of foreign funds to other NGOs, cut the administrative expense cap from 50% to 20%, and required a designated account at SBI's New Delhi Main Branch.
  • FCRA registrations must be renewed every five years.

Quick recall

When was the FCRA Amendment Bill, 2026 introduced?
In the Lok Sabha on 25 March 2026.
When was it referred to a Joint Parliamentary Committee?
On 12 August 2026, to a 31-member JPC headed by Sanjay Jaiswal.
What is the 'designated authority' in the Bill?
A government-appointed authority in which foreign contributions and assets vest if an NGO's FCRA registration is cancelled, surrendered or lapses.
Where can a person appeal against the designated authority?
To a District Judge within 90 days.
Which constitutional right do critics say the Bill violates?
The right to property under Article 300A, because assets vest without a prior hearing.
What did the FCRA amendment of 2020 change?
Banned transfer of foreign funds to other NGOs, cut the admin cap from 50% to 20%, and required an FCRA account at SBI's New Delhi Main Branch.
When was the original FCRA enacted?
In 1976; the current law is the FCRA, 2010.
How often must FCRA registration be renewed?
Every five years.

Prelims practice question

Under the FCRA amendment of 2020, foreign contributions must first be received in an account at:

  1. Any scheduled commercial bank
  2. RBI, Mumbai
  3. SBI, New Delhi Main Branch
  4. Any public sector bank in the NGO's State
Show answer

Answer: (c) SBI, New Delhi Main Branch. The 2020 amendment mandated a designated FCRA account at the State Bank of India's New Delhi Main Branch.

Use this in UPSC Mains: previous-year questions

Recurring theme: Role, regulation and accountability of NGOs and civil society in governance

  1. 2026 · GS2 · 15 marksCovers one partUse it in the example

    To what extent do pressure groups, social movements and corporate lobbies deepen pluralistic democracy in India by representing excluded interests? Analyse whether the growing convergence of corporate wealth and political power poses a threat to the autonomy of formal democratic institutions.

    How to use this

    Shows how rules on foreign funding shape the space NGOs have to represent excluded interests.

    • Note that NGOs work in health, education, disaster relief and rights advocacy, often reaching places the State does not.
    • Around 22,000 FCRA registrations have been cancelled since 2010, according to the International Center for Not-for-Profit Law.
    • Warn of a chilling effect: foreign donors withdraw and NGOs avoid policy criticism.
  2. 2025 · GS2 · 10 marksCovers one partUse it in the body

    Civil Society Organizations are often perceived as being anti-State actors than non-State actors. Do you agree? Justify.

    How to use this

    Lets you present both the State's security rationale and civil society's concerns in the FCRA debate.

    • The Home Ministry defends the 2026 Bill on transparency, accountability and national security, saying the current 'prescribed authority' is only a passive custodian of assets.
    • Opposition members on the JPC argued that vesting assets without a prior hearing violates the right to property under Article 300A.
    • Suggest risk-based scrutiny, reasons for cancellation, time-bound appeals and asset transfer only after judicial determination of misuse.
  3. 2021 · GS2 · 15 marksCovers one partUse it in the body

    Can Civil Society and Non-Governmental Organisations present an alternative model of public service delivery to benefit the common citizen? Discuss the challenges of this alternative model.

    How to use this

    Supplies funding and legal constraints as concrete challenges to NGO-led service delivery.

    • Opposition JPC members raised concerns about schools and hospitals built with mixed foreign and domestic funds, whose assets could vest in a government authority.
    • The 2020 amendment banned transfer of foreign funds to other NGOs and cut the administrative expense cap from 50% to 20%, hurting small grassroots groups.
    • Suggest allowing traceable sub-granting and encouraging domestic philanthropy and CSR as complementary funding.
  4. 2016 · GS2 · 12.5 marksCovers one partUse it in the example

    "In the Indian governance system, the role of non-state actors has been only marginal." Critically examine this statement.

    How to use this

    Shows how State regulation of funding limits how far non-state actors can play a role in governance.

    • Note that NGOs deliver health, education and disaster relief, often reaching places the State does not.
    • The 2026 Bill lets assets created with foreign funds vest permanently in a government-appointed 'designated authority' if FCRA registration is not restored.
    • Around 22,000 FCRA registrations have been cancelled since 2010, according to the International Center for Not-for-Profit Law.
  5. 2015 · GS2 · 12.5 marksAnswers it directlyUse it in the body

    Examine critically the recent changes in the rules governing foreign funding of NGOs under the Foreign Contribution (Regulation) Act (FCRA), 1976.

    How to use this

    Lets you update the answer with the 2020 amendment and the 2026 Bill, and critically examine both.

    • The 2020 amendment banned sub-granting, cut the administrative cap from 50% to 20% and mandated a designated account at SBI's New Delhi Main Branch.
    • The 2026 Bill adds Chapter IIIA: foreign-funded assets provisionally vest in a 'designated authority' on cancellation, surrender or lapse, permanently if registration is not restored; appeal lies to a District Judge within 90 days.
    • Introduced on 25 March 2026, the Bill went to a 31-member JPC under Sanjay Jaiswal on 12 August; Opposition members say vesting without hearing violates Article 300A.

Mains practice question

Regulation of foreign funding is necessary, but excessive control can weaken civil society. Examine in the context of recent FCRA amendments. (250 words)

Model answer

The Foreign Contribution (Regulation) Act, 2010 aims to prevent foreign funds from influencing national interest, elections and security. Its amendments have become steadily stricter, and the 2026 Bill proposes government takeover of assets created with foreign funds.

Why regulation is needed

  • Prevent money laundering, terror financing and funding of conversion or unrest.
  • Transparency about who funds public advocacy.
  • Protect sovereignty from foreign interference in domestic policy.

Concerns with recent changes

  • 2020 amendment: ban on sub-granting cut off small grassroots NGOs that relied on larger partners; the 20% administrative cap hurt research and advocacy groups.
  • Cancellations: thousands of licences cancelled or not renewed, often without detailed reasons.
  • 2026 Bill: asset takeover powers create uncertainty over schools, hospitals and shelters built over decades.
  • Chilling effect: foreign donors withdraw, and NGOs avoid policy criticism.

Contribution of NGOs

Health, education, disaster relief, and rights advocacy, often reaching places the State does not.

Balanced approach

  • Risk-based scrutiny rather than blanket restrictions.
  • Reasons for cancellation and a time-bound appeal to an independent body.
  • Allow sub-granting with traceability.
  • Asset transfer only after judicial determination of misuse.
  • Encourage domestic philanthropy and CSR as complementary funding.

Accountability and a vibrant civil society are compatible. The law should target misuse, not the sector as a whole.

The basics

Why this matters

Many Indian NGOs, schools, hospitals and religious bodies receive foreign donations. The FCRA Amendment Bill, 2026 would let the government take over assets built with foreign money when an organisation loses its registration. It raises questions about property rights, due process and the space for civil society.

31
Members of the Joint Parliamentary Committee examining the Bill
Headed by BJP MP Sanjay Jaiswal; referred on 12 August 2026.

What the Bill does

It creates a government-appointed 'designated authority' for assets of organisations whose registration ends.

How assets would vest
  1. 1Registration endsCancelled, surrendered or not renewed.
  2. 2Provisional vestingForeign funds and assets pass to the designated authority.
  3. 3Window to restoreThe organisation can seek fresh registration.
  4. 4Permanent vestingIf not restored, assets can be transferred to government bodies.
  5. 5AppealTo a District Judge within 90 days.

The two sides

The debate is about accountability versus overreach.

Government versus critics
Government
  • Current law has no process for assets
  • Transparency and national security
  • Stops misuse of foreign funds
vs
Critics
  • No prior hearing: Article 300A
  • Mixed-funded schools and hospitals at risk
  • Chilling effect on civil society

How we got here

Each amendment has tightened control.

FCRA milestones
  1. 1976FCRA enacted
  2. 2010New FCRA replaces it
  3. 2020Amendment tightens rules
  4. 25 Mar 2026Amendment Bill introduced
  5. 12 Aug 2026Referred to a JPC

What to watch

The Joint Parliamentary Committee will report in the Winter Session. Its changes on hearings, mixed assets and places of worship will decide whether the Bill satisfies Article 300A and preserves the Role of NGOs in India. The parent law is the Foreign Contribution (Regulation) Act.

You now know

  • The Bill was introduced on 25 March 2026 and referred to a 31-member JPC on 12 August.
  • It creates a designated authority in which assets of de-registered NGOs vest.
  • Appeals lie to a District Judge within 90 days.
  • Critics cite Article 300A and the lack of a prior hearing.

Go deeper

In one line: A new FCRA Bill would let the government take over assets built with foreign money when an NGO loses its licence, raising questions about property rights and civil society.

Why it matters for UPSC

GS2 asks about the role of NGOs and civil society, and GS3 about external funding and security. FCRA is a recurring topic.

The core idea

The Foreign Contribution (Regulation) Act aims to keep foreign money out of politics and away from activities against national interest. Each amendment has tightened control. The 2026 Bill tackles a real gap, since the law had no clear process for assets of NGOs that lose registration. But it lets a designated authority take them over automatically, without a prior hearing, which critics say clashes with Article 300A. Schools, hospitals and places of worship built with mixed funds are the hardest cases.

Numbers and dates to remember

  • 1976: FCRA; 2010: current Act; 2020: amendment.
  • 25 March 2026: Bill introduced; 12 August 2026: sent to a 31-member JPC.
  • 90 days: time to appeal to a District Judge.

Where to go next

In one line: The Bill fills a real legal gap but does it in a way that risks disproportionate loss of property without a hearing.

The gap

Under the current law, a 'prescribed authority' can hold assets of organisations whose registration is cancelled, but there is no clear process to manage or dispose of them.

The concerns

  • Automatic vesting without a hearing, contrary to natural justice.
  • Assets built with both foreign and domestic funds.
  • Renewals delayed for administrative reasons could trigger vesting.
  • Places of worship and institutions serving the public.

Balancing tests

Under Article 300A, deprivation of property needs authority of law and, courts have said, a fair procedure.

Possible improvements

Prior notice and hearing, separating foreign-funded assets, protecting beneficiaries such as students and patients, and independent appellate review. The Joint Parliamentary Committee is the forum for these changes to the Foreign Contribution (Regulation) Act; the outcome will shape the Role of NGOs in India.

Where to go next

Foreign Contribution (Regulation) Act

The law and its purpose

In one line: The FCRA regulates the acceptance and use of foreign contributions by individuals, associations and companies in India.

History

First enacted in 1976; replaced by the FCRA, 2010; amended in 2020.

Key rules

Registration renewed every five years, a designated FCRA account at SBI's New Delhi Main Branch, a 20% cap on administrative expenses, and no transfer of foreign funds to other organisations.

Who is barred

Election candidates, political parties, judges, government servants and media organisations, among others.

Where to go next

Article 300A

The right to property today

In one line: Article 300A says no person shall be deprived of property save by authority of law.

History

The right to property was a fundamental right under Articles 19(1)(f) and 31 until the 44th Amendment (1978) made it a constitutional right under Article 300A.

What courts require

Deprivation needs a valid law, and courts have said the procedure must be fair, including notice and hearing.

Relevance

Critics argue automatic vesting of NGO assets without a hearing fails this standard.

Where to go next

Joint Parliamentary Committee

How Parliament scrutinises Bills

In one line: A Joint Parliamentary Committee is an ad hoc committee of members from both Houses set up to examine a Bill or an issue.

How it is formed

By a motion in one House agreed to by the other, with members usually in a 2:1 ratio of Lok Sabha to Rajya Sabha.

Powers

It can take evidence from experts and stakeholders; its recommendations are advisory.

Examples

JPCs have examined bills such as the data protection bill and the Waqf amendment bill.

Where to go next

Role of NGOs in India

What civil society does

In one line: NGOs work in areas such as health, education, relief, rights and the environment, often reaching people the State does not.

Contributions

Service delivery, advocacy, research and disaster response.

Concerns raised

Transparency, foreign influence and misuse of funds.

Regulation

Registration under societies, trusts or company law, income tax exemptions, and FCRA for foreign funds.

Where to go next

Take the 21 September 2026 quiz: 30 Prelims-style questions with answers

Syllabus

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