MHA May Allow NGOs To Apply For ‘Prior Permission’ Only Twice
According to latest reports, the Ministry
of Home Affairs may now allow NGOs to receive foreign contributions through the
Prior Permission route only twice and after which it must necessarily apply for
‘Registration’ under FCRA 2010.
of Home Affairs may now allow NGOs to receive foreign contributions through the
Prior Permission route only twice and after which it must necessarily apply for
‘Registration’ under FCRA 2010.
FCRA 2010 offers two options:
1.
Prior Permission of the Central Government (Ministry of
Home Affairs — MHA) to receive a specific sum of money from a specific foreign
source.
Prior Permission of the Central Government (Ministry of
Home Affairs — MHA) to receive a specific sum of money from a specific foreign
source.
This option is
usually exercised by NGOs which are less than three years old and therefore
considered ineligible for Registration under FCRA 2010.
usually exercised by NGOs which are less than three years old and therefore
considered ineligible for Registration under FCRA 2010.
This option is also
exercised for one-off contributions.
exercised for one-off contributions.
The NGO is required
to file returns under FCRA till such time as the donation/grant is completely
exhausted.
to file returns under FCRA till such time as the donation/grant is completely
exhausted.
2.
Registration under FCRA means the NGO can receive
unlimited funds from unlimited foreign sources.
Registration under FCRA means the NGO can receive
unlimited funds from unlimited foreign sources.
Earlier NGOs could apply for Prior
Permission as often as required. However, MHA will now
restrict this to a maximum of two Prior Permissions and after which the NGO
must apply for Registration.
Permission as often as required. However, MHA will now
restrict this to a maximum of two Prior Permissions and after which the NGO
must apply for Registration.
The prior permission facility, according to
MHA’s fresh interpretation of Section 12 of FCRA, 2010, and Rule 9 of FCRA
Rules, is essentially meant for start-ups and cannot be used more than twice
for the same project.
MHA’s fresh interpretation of Section 12 of FCRA, 2010, and Rule 9 of FCRA
Rules, is essentially meant for start-ups and cannot be used more than twice
for the same project.
This interpretation, if enforced, may
impact certain NGOs which are not in the government of India’s good books. For
example a certain NGO has reportedly applied eight times since 2000 for prior
permission to receive foreign contributions of which four were approved and
four denied. To get any further contributions from abroad, this NGO may now have
no option but to register under FCRA.
impact certain NGOs which are not in the government of India’s good books. For
example a certain NGO has reportedly applied eight times since 2000 for prior
permission to receive foreign contributions of which four were approved and
four denied. To get any further contributions from abroad, this NGO may now have
no option but to register under FCRA.
MHA in the meantime is of the view that
FCRA 2010 and the Rules notified therein are clear that an NGO cannot seek
prior permission for the same project more than twice.
FCRA 2010 and the Rules notified therein are clear that an NGO cannot seek
prior permission for the same project more than twice.
Section 12(4)(b) of FCRA states that the
‘person’, (‘person’ is a term used for both individual and institution), making
an application for registration should have undertaken reasonable activity in
the chosen field for the benefit of society for which the foreign contribution
was proposed to be utilized. This, according to the MHA means that start-ups
can get foreign funding through the prior permission route until they are
eligible for registration.
‘person’, (‘person’ is a term used for both individual and institution), making
an application for registration should have undertaken reasonable activity in
the chosen field for the benefit of society for which the foreign contribution
was proposed to be utilized. This, according to the MHA means that start-ups
can get foreign funding through the prior permission route until they are
eligible for registration.
As per Section 12(4)(c) of FCRA 2010: “the
person making an application for giving prior permission has prepared a
reasonable project for the benefit of society for which the foreign
contribution is proposed to be utilized”.
person making an application for giving prior permission has prepared a
reasonable project for the benefit of society for which the foreign
contribution is proposed to be utilized”.
Rule 9 of FCRA Rules, meanwhile, says no
person shall make a second application for registration or prior permission
within six months of submitting an application either for the grant of prior
permission for the same project or for registration.
person shall make a second application for registration or prior permission
within six months of submitting an application either for the grant of prior
permission for the same project or for registration.
According to MHA, there’s a reason why the
rule speaks of ‘second’ application and not ‘subsequent’ applications. The only
logical reasoning is that there can be no third application for foreign funding
for the same project under the prior permission route. For that, the NGO must
first register under FCRA … or so the MHA feels!
rule speaks of ‘second’ application and not ‘subsequent’ applications. The only
logical reasoning is that there can be no third application for foreign funding
for the same project under the prior permission route. For that, the NGO must
first register under FCRA … or so the MHA feels!
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