• What proportion of foreign exchange inflows are through this channel? In 2004-05, FCRA inflow was Rs 6,256 crore, or 0.6 per cent of the gross annual inflow of foreign funds. In comparison, the Indian corporate sector contributed an estimated Rs 30,000 to Rs 35,000 crore to charitable institutions in 2006-07. In addition, individuals donate to charitable causes.
• Other than registration, are there any other restrictions? FCRA registered organisations have to conform to certain guidelines. All funds received through this route must come through a single bank branch. All receipts and utilisation, with source of funding, must be reported.
• What is the need for a new bill? The government believes that “significant developments have taken place since 1984 such as changes in the internal security scenario, an increased influence of voluntary organisations, spread of use of communications and information technology, quantum jump in the amount of foreign contribution received, and large scale growth in the number of registered organisations”. It proposes to replace this act by a new legislation that provides for closer government monitoring, additional registration requirements, and expands the classification of individuals barred from receiving foreign contribution. The Foreign Contribution Regulation Bill, 2006 was introduced in Rajya Sabha in December, and is being examined by the parliamentary standing committee on home affairs.
• Do other laws cover the major concerns?
Many of the objectives of FCRA (and the pending bill) are met by the Foreign Exchange Management Act as well as the Prevention of Money Laundering Act and the Unlawful Activities Prevention Act which was amended in 2004 (to cover terrorist activities and funding). Auditing issues are covered by the Income Tax Act, 1961 as well as laws governing companies, trusts and societies. The conduct of bureaucrats and judges are governed by service rules and election candidates by election-related rules. Any loopholes in these can be plugged by amending the acts and rules.
... contd.
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