‘Foreign source’ includes any company that has over 50 per cent foreign shareholding. By this definition ICICI Bank (72 per cent shares held by FIIs and ADRs) and Infosys (50.1 per cent) would be considered ‘foreign source’, and any donations by them would be subject to FCRA requirements.

The Bill prohibits acceptance of ‘foreign hospitality’ by a legislator, office bearer of a political party, judge, government servant or an employee of a PSU without prior permission. Foreign hospitality includes free boarding, lodging and transport, and excludes any offer which is “a purely casual one”. Thus, it is not clear whether a government servant staying with his brother or a classmate on a trip to the US for a week would need prior permission or such hospitality would be considered a casual one.

The Act lists eight categories that are prohibited from receiving any foreign contribution. In addition to legislators, judges and bureaucrats, this list includes correspondents, columnists, cartoonists, editors, printers and publishers of newspapers. It also includes any association or company engaged in production or broadcast of audio news or audio visual news or current affairs programmes through any electronic mode (thus covering radio, TV and the internet). This implies that ICICI Bank (which is a “foreign source”) cannot institute an award for the best cartoonist in India.

The Bill sets a cap of 50 per cent of any foreign contribution to be used for administrative expenses. The definition of what constitutes “administrative expenses” is left to be prescribed by the central government. This raises two issues. First, why should the government specify how the funds may be used as long as they are not for illegitimate purposes. And second, are salaries paid to staff (including teachers) by an NGO considered administrative expenses? We are back to detailed prescriptions, which means a field day for those who can find their way through the maze of regulations.

... contd.