Government rescinds FCRA licence of associations associated with Gandhi family: A Look at Foreign Contributions

By: Lakshita Bhagat

Congress leaders have said they will challenge the decision of licence cancellation in court and have termed the government's action diversion tactics from key issues

The Ministry of Home Affairs has cancelled the Foreign Contribution Regulation Act (FCRA) licence or certificate of registration of the Rajiv Gandhi Foundation and Rajiv Gandhi Charitable Trust (RGCT), citing law violations. Three organisations headed by Sonia Gandhi, with many Congress leaders as its trustees, came under the government scanner in 2020 following allegations by the BJP that these organisations have received funds from China, specifically The Embassy of People’s Republic of China. Subsequently, the government set up an inter-ministerial committee to ‘coordinate investigations’ of alleged violations of the provision of FCRA, PMLA (Prevention of Money Laundering Act) and others. Two years later, the Ministry has cancelled the FCRA license of two Congress-related organisations. 

How many foreign contributions have been received?

In early July this year, the Ministry of Home Affairs tweaked certain FCRA rules in “an effort to lessen the compliance burden on NGOs”, including Rule 13, which pertains to the declaration receipt of foreign contribution. Consequently, the quantum of annual returns of NGOs and a detailed list of NGOs and their status have been made off limits for the public view as it has been deemed ‘unnecessary’. The only data available at the time of writing are annual returns filed and the total number of NGOs and their state-wise breakup. As per the data, the total number of annual returns filed stands at 348015. 

The chart above tells us about the annual returns filed between 2006/07 and 2020-21 of all types of associations. As we can see, the annual returns filed in 2019-2020 and 2020-21 are fifteen years low; this may partly be explained by the 2020 amendment that increased scrutiny. Currently, there are 16548 active FCRA associations, 20690 cancelled, and 12895 associations deemed expired at the time of writing. States with the highest numbers of active FCRA associations are Tamil Nadu (2461), Maharashtra (1811), Karnataka (1452), Andhra Pradesh (1140), and West Bengal (1001). Three of these are southern states. In comparison, many other states, despite being population dense, have a relatively smaller number of FCRA associations, such as Uttar Pradesh (705), Bihar (408), Rajasthan (370) and Madhya Pradesh (337). 

In light of data deficiency related to foreign contributions amount, we can refer to some previously published accounts that give us a sense of foreign donations estimates over the years. As we can see from the chart below, from 2014 onwards, foreign contributions increased steadily. However, there is no data for recent years for the reasons discussed above. 

What is FCRA?

First passed during the emergency in 1976, the Foreign Contribution (Regulation) Act (FCRA) was meant to check the inflow of foreign contributions and their purpose. The Act was replaced later. At present, the flow of foreign donations comes under the purview of the 

‘Foreign Contribution (Regulation) Act, 2010 and the Foreign Contribution (Regulation) Rules, 2011 (FCRR 2011) read with other notifications/orders etc., as issued there under from time to time’. In 2020, the Act was further amended, giving the government tighter control over accepting and using foreign contributions by non-profit organisations. 

Any person or organisation can receive foreign contributions subject to that they have (i) a definite cultural, economic, educational, religious, or social programme, (ii) obtain the FCRA registration/prior permission from the government and (iii) must not be prohibited under Section 3 of FCRA, 2010. As per the FRCA (2010), foreign contributions ‘means the donation, delivery or transfer made by any foreign source’. The Act ‘prohibit acceptance and utilization of foreign contribution or foreign hospitality for any activities detrimental to national interest and for matters connected therewith or incidental thereto’. As per the provisions of sections 13 and 14 of the FCRA, 2010, the government can suspend (for 180 days pending inquiry) or cancel the certificate of registration (imposing three years ineligibility for registration or grant of prior permission). Cancellation of licences can happen on several grounds, including if, in view of the government, it is in the ‘public interest’ to do so.  

What next for RGF?

Founded in 1991 after the assassination of then-prime minister Rajiv Gandhi, the Rajiv Gandhi Foundation (RGF) has been involved in social and humanitarian causes, as per its website. Congress leaders have said they will challenge the decision of licence cancellation in court and have termed the government's action diversion tactics from key issues