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Society & Culture Around Town Book Excerpts Vigyapanti The Dating Story

More Judiciary Education YourTurn Work With Us Campus Voice

India’s non-profits are in a regulatory hell—state surveillance to confiscation of assets

Concerns around law and order or anxieties over religious conversion must be weighed against the developmental reality that the State cannot, on its own, meet the scale of India’s needs.

Imagine if India were to regulate capital raising for its businesses like this. An entrepreneur raises overseas funding after months of effort. The government gives them a licence to receive that capital—for five years. At the end of that period, the entrepreneur wishes to bootstrap their business, and not raise capital. At this point, the State may step in, take control of their assets, run their business, eventually sell those assets and transfer the proceeds to the Consolidated Fund of India. Absurd? This is precisely how India will regulate its civil society organisations if the amendments to the Foreign Contribution Regulation Act 2010 tabled last month in the Lok Sabha are passed as is.

The FCRA is a law governing foreign grants, donations and endowments—all called “contribution”—to Indian non-profits. Since 2014, the FCRA has been amended three times—twice through Finance Acts and once through a comprehensive amendment in 2020—each progressively tightening the regulatory grip on civil society organisations. Late last month, the Home Minister tabled yet more amendments to the FCRA. The latest FCRA Amendment Bill marks a shift from regulating capital to controlling assets.

More stringent than an emergency-era law

To understand how we got here, it is worth revisiting the FCRA’s origins in 2010. The FCRA’s predecessor law—the Foreign Contribution (Regulation) Act 1976, enacted during the Emergency—was primarily a political control statute. Its focus was narrow: To prevent foreign influence over elections, the press, and organisations deemed political in nature.

By the late 2000s, the number of non-profits had grown significantly, and foreign flows had increased. The FCRA was introduced in this backdrop, also shaped by heightened security concerns following the Mumbai attacks. But the 2010 law effectively........

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