A Presentation on FCRA and Bilateral Development Assistance.

A Presentation on FCRA

and Bilateral Development

Assistance

Foreign Contribution Regulation Act, 1976

• An act to regulate the acceptance and utilization of foreign contribution or foreign hospitality by certain persons or associations, with a view to ensuring that parliamentary institutions, political associations and academic and other voluntary organizations as well as individuals working in the important areas of national life may function in a manner consistent with the values of a sovereign democratic republic, and for matters connected therewith or incidental thereto.

Need for Foreign Contribution Regulation Act, 1976

• Regulating acceptance and utilization of Foreign contribution and Foreign hospitality by individuals and associations working in important areas of national life.

• Not meant to prohibit receipt of foreign contribution for genuine purposes.

• Security considerations.

Stakeholders

Citizens

Chartered Accountants &

other professionals

Public servants, Juges, Members of legislature, political

parties

Banks

Ministry of Home Affairs &

NIC

NGOs/Trusts

Organizations of political

nature

Employees of MHA Security

agencies

FCRA FCRA

Focus

Facilitate receipt of Foreign Contribution for genuine purpose without compromising National security concerns

Foreign contribution

 Foreign contribution means the donation, delivery or transfer, made by any foreign source of any

 a)article, not given to a person as a gift, for personal use, if the market value in India of such article exceeds one thousand rupees;

b)currency, whether Indian or foreign; or

c)foreign security

Foreign Source• Government of foreign country or any agency of such Government.• International agencies, not being of

a) United Nations or its specialized agenciesb) World Bank Groupc) International Monetary Fundd) Such other agencies so notified by the Central Government.

• Foreign company or Corporation incorporated in foreign country• Trade Union in a foreign country • Foreign Trust or Foundation or Society or Club formed or registered

outside India• Company where more than half of shareholding held by foreign Govt.,

foreign citizens, foreign corporations• Citizens of foreign countries

Who cannot accept Foreign Contribution

a) Candidate for elections.

b) Correspondents, columnists, cartoonists, editor, owner, printer.

c) Judge, Government servant or employee of any corporation

d) Member of any Legislature

e) Political party or office-bearer thereof.

Types of permission

An association having a definite cultural, economic, educational, religious or social programme can receive foreign contribution after it obtains

-the prior permission of the Central Government, or

-gets itself registered with the Central Government.

Registration• Means permanent permission to accept foreign foreign

contribution from any foreign source.• Granted to associations with proven track record

Reasons for rejection of Registration• Association being in formative stage• Association formed for personal gain• Association involved in proselytisation• Members of Executive Committee involved in illegal/criminal

activities• Sister association prohibited under the act• Applicant association prohibited• Association involved in anti-national activities • Stated objects of the association not being pursued.

Must DOs for the Registered Association

• Designated exclusive Bank account for receipt and utilization of foreign contribution.

• Submission of annual FC-3 returns.• Change in members, address, objectives of the association

to be reported to Central Government within 30 days.• Change in the O.B’s by 50% or more with prior permission

only• Exclusive accounts for receipt and utilisation of foreign

contribution and audit by the Chartered Accountant.• Substantial proportion of foreign contribution to be spent on

welfare activities• Reduction in Administrative expenses

Prior PermissionWhen required• Where the association does not have a FCRA registration• Where the association is placed under prior permission

category• Where registration is frozen• Associations of political nature, not being political party

Essentials of prior permission• Donor specific• Donee specific• Amount specific – within overall limits• Purpose specific

RECEIPT OF FOREIGN CONTRIBUTION

Year Amount % Increase over Rs/ crores Previous Year

2000-01 4535.2 15.52001-02 4870.5 7.42002-03 5046.5 3.52003-04 5105.5 1.22004-05 6256.6 22.5

Amount wise break-up of reporting association

Foreign Contribution

Year Below Between Between Above

Rs. 1 cr Rs 1-5 cr Rs 5-10 cr Rs. 10 cr

2000-01 13815 669 62 52

2001-02 14761 721 77 59

2002-03 15650 798 76 66

2003-04 16187 818 83 57

2004-05 17373 985 112 70

TOP DONOR COUNTRIES

Foreign Contribution Rs/crores

Country 2002-03 2003-04 2004-05

USA 1679 1584 1926

Germany 715 757 930

U.K. 685 676 764

Italy 315 350 432

Netherlands 261 304 353

Top donor Agencies Foreign contribution (Rs. in crores)

DONOR’S NAME & COUNTRY 2002-03 2003-04 2004-05

Foundation Vicent E Ferrer, Spain 79.16 135.15 183.31

World Vision International, USA 90.24 94.36 123.25

Gospel for Asia, USA 50.82 39.80 110.12

Foster Parents Plan Intl., USA 53.73 57.56 65.60

Compassion International, USA 3.60 40.54 60.93

Top Recipient DistrictsForeign Contribution Rs/crores

DISTRICT 2002-03 2003-04 2004-05

Chennai 363.45 384.53 560.40

Bangalore 357.66 357.66 376.97

Mumbai 283.59 299.63 321.82

Ananthapur 168.95 209.16 287.70

Kolkata 181.44 179.86 206.35

TOP RECIPIENT ASSOCIATIONS

Foreign Contribution Rs/crores

NAME OF ASSOCIATION & STATE 2002-03 2003-04 2004-05

World Vision, Tamil Nadu 98.01 103.74 133.57

Rural Develkopment Trust, Andhra Pradesh 84.66 125.99 118.75

Sri Sathya Sai Central Trust, Andhra Pradesh 60.19 49.96 77.57

Caritas India, Delhi 49.49 37.54 65.30

Foster Parents Plan International Inc. Delhi 53.65 56.80 64.91

TOP TEN PURPOSES FOR THE YEAR 2004-05

PURPOSE Foreign Contribution

(Rs. In crores)

Establishment expenses 948.20 Relief/Rehabilitation of victims of natural calami 655.65 Rural Development 582.48 Welfare of Children 303.20 Construction of school/college 295.94 Grant of stipend/scholarship/assistance 210.13 Welfare of the orphans 189.37 Construction/Running of hospital/dispensary/clinic 182.69 Construction/Repair/Maintenance of places of worship 137.21 Holding of Free Medical/Health/Family Welfare/ 126.28

Immunization camps

TOP RECIPIENT STATES/UNION TERROTORY

Foreign Contribution

(Rs. in crores)

State/UT 2002-03 2003-04 2004-05

Tamilnadu 774 800 1190

Delhi 880 857 1075

Andhra Pradesh 629 684 913

Maharashtra 505 480 552

Karnataka 489 528 509

Bilateral Development Assistance

Policy for Government and subordinate agencies

Bilateral development assistance to be accepted from• G8countriesnamelyUS,UK,Japan,Germany,France,

Italy, Canada,Russian Federation and European commission

• European Union countries if bilateral annual assistance to India exceeds USD 25 million

• Routed through or co-financed with a multilateral agency

Tied aid not to be accepted

Bilateral Development assistance to NGOs,autonomous institutions and other such bodies

• Assistance may be accepted from any country• Assistance to be accepted for projects of economic and

Social importance only• Registration or Prior Permission under FCRA mandatory• Proposals to be submitted to DEA through concerned

development partner• Bilateral partner may transfer funds after approval of

DEA• Bilateral partner may make arrangement for monitoring• Bilateral partner to submit status report to DEA in April

and October every year

Some Initiatives

• Empowering the stakeholders by transparency in administration

• Online status enquiry• Management by objectives• Process standardization• Revamped monitoring• G2B partnership

THANKS