The Supreme Court on Friday upheld the constitutional validity of the Foreign Contribution (Regulation) Amendment Act, 2020, or FCRA Act, which restricted the ways in which contributions from abroad are handled by Indian organisations, reported Bar and Bench.
“Receiving foreign donations cannot be an absolute or even a vested right,” the court said. “It is open to the State to have a regime which may completely prohibit receipt of foreign donation, as no right inheres in the citizen to receive foreign contribution [donation].”
The Act lays down conditions under which civil society organisations can receive funds from abroad. It reduces the limit of usable foreign contribution for administrative expenses from 50% to 20% and prevents transfer of foreign funding to any other person. It also empowers the government to cancel the FCRA certificate of an organisation.
The petitioners had argued that the provisions of the Act were arbitrary and stringent, reported Live Law. They had argued that the amendments make the functioning of NGOs difficult.
A bench comprising Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar on Friday observed that foreign donations can influence a country’s policies and may lead to the imposition of a political ideology.
“Such being the expanse of the effect of foreign contribution coupled with the tenet of constitutional morality of the nation, the presence/inflow of foreign contribution in the country ought to be at the minimum level, if not completely eschewed,” the court said.
The judges said that there was “no dearth of donors in India” and added that charitable organisations should focus on donors from within the country.
The bench said that foreign donations are “a reflection on the constitutional morality of the nation as a whole being incapable of looking after its own needs and problems”. It added that foreign contributions were qualitatively different from foreign investments.
The court also upheld the validity of Section 17 of the Act, which requires NGOs to open a primary account for FCRA contributions in a branch of the State Bank of India in New Delhi.
However, the court held that Aadhaar Card may need not be submitted for FCRA clearance. It said that the applicants should be allowed to produce passports instead.
Under the law, all the key functionaries of non governmental organisations have to furnish their Aadhaar cards.
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