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Developmental Issues

The Foreign Contribution (Regulation) Act was amended in 2020 to discourage expenditure by non-governmental organisations (NGOs) on “unproductive items” such as inflated staff salaries and luxury vehicles, the Union Home Ministry said in its 2021-22 annual report.

The Ministry said that the Foreign Contribution (Regulation) Amendment Bill, 2020 was passed by Parliament in September 2020 and notified on September 28 that year.

“The amendments would help effectively monitor the receipt and utilisation of foreign contribution,” it said.

It said provisions such as Aadhaar of key functionaries of NGOs, receipt of foreign contribution only through designated FCRA bank accounts with the State Bank of India, a complete ban on domestic transfer of foreign funds and reduction of administrative expense limit to 20% from 50% “would ensure exact identification of office-bearers and eliminate chances of benami /bogus entry and would discourage expenditure on unproductive items like inflated staff salaries, posh buildings and office and luxurious vehicles”.

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