Alleged misuse of foreign funds by NGOs is under the government scanner

By Raju vernekar

While the new Foreign Contribution (Regulation) Amendment Rules and Bill of 2026 (FCRA Bill) have been referred to the Joint Parliament Committee (JPC) by the Lok Sabha, according to the central government, there have been instances of certain NGOs using funds for activities not mandated under the rules.

 The JPC is expected to review the legislation and submit its report during the first week of the upcoming Winter Session.

By now over 72 per cent of FCRA registrations have either been cancelled or allowed to expire, and barely 28 per cent of NGOs are currently active, who are stated to be around 14,434. Tamil Nadu has the largest number of 1,468 NGOs, working in education and social services,

followed by Maharashtra-1,817, Karnataka-1,453 and Andhra Pradesh-1,145. According to the Ministry of Home Affairs (MHA), the registrations have been cancelled for the failure to file annual returns, the lack of renewal applications before expiry, and long-term inactivity.

FCRA

FCRA was enacted in 1976 to regulate the use of foreign contributions and hospitality. In 2010 it was replaced with stronger compliance architecture. Mandatory renewal of registration every five years, strict conditions for registration, suspension, cancellation, vesting of assets, and compounding of offences, were introduced.

The FCRA 2026 Bill

Now the NGOs are required to specify exact operational purposes, with separate fees per category. A new body will be set up to manage and dispose of assets of organizations whose registration are cancelled, surrendered, or expired without renewal. Religious activities like worship and heritage preservation will be permitted, but no foreign funds can be used for religious conversion.  Organizations must disclose official social media accounts, websites and publications. The definition of functionaries covers trustees, governing body members, and managers. The registration will be renewed only if the organization has proof that it has used at least Rs.10 lakh of foreign contributions over the preceding two years. 

Action against NGOs

The government is wary of the funds used by certain NGOs to derail the development activities in the country. Its suspicion gained ground when large-scale protests broke out against the Russian-backed India’s largest nuclear power plant in Kudankulam in Tamil Nadu since its inception in 1988 and construction in 2002. The opposition to the project arose due to safety concerns following the Fukushima disaster and its potential environmental impact.

In 2011–2012, then-Prime Minister late Manmohan Singh and home ministry officials stated that foreign-funded groups from the US and Scandinavian countries were fueling the prolonged agitation to obstruct India's energy development. Subsequently a German national involved in supporting the local anti-nuclear demonstrations was deported for visa violations. The CBI and Tamil Nadu police registered cases against multiple NGOs for misusing overseas donations, and the licenses of the Tuticorin Diocesan Association, East Coast Research and Development Trust, and Greenpeace India were cancelled over allegations that their campaigns acted against the country’s economic progress.

In April 2015 the MHA suspended the FCRA license of “Greenpeace India” for six months, and its bank accounts were frozen over alleged under-reporting of foreign funds. Its registration was cancelled in September 2015 on charges that the NGO prejudiced public and economic interests. The cancellation of the registration blocked the foreign donations, forcing it to scale down operations and reduce staff significantly.

The MHA cancelled the FCRA registration on June 16, 2016, of the “Sabrang Trust”, run by activist Teesta Setalvad, on allegations that the trust unauthorizedly utilized foreign contributions and spent Rs.50 lakh on the “Sabrang Communications and Publishing Pvt Ltd”, where the trustees were directors who used funds for personal expenses.

In February 2023, the FCRA registration of the Delhi-based public policy think tank, the “Centre for Policy Research” (CPR), was suspended for 180 days, citing prima facie violations, crippling its foreign funding and operations. The suspension followed the raid on its premises in September 2022. In January 2024, its FCRA registration was cancelled on charges that it used foreign funds for undesirable purposes, transferred contributions to other entities improperly, and deposited money into non-designated accounts. Subsequently, its exemption, under section 12(A) of the IT Act, 1961, to receive funds was also cancelled.

The raids were also conducted at the office of NewsClick (news channel) by the CBI in December 2023 on charges of violation of FCRA regulations. Similarly, the FCRA registration of the Students’ Educational and Cultural Movement of Ladakh (SECMOL) run by climate activist Sonam Wangchuk was cancelled in September 2025 on charges of anti-national activities. Subsequently, the CBI visited SECMOL and the Himalayan Institute of Alternative Learning (HIAL) and sought details of foreign funds received.

However, Wangchuk’s wife, Gitanjali J. Angmo, a mentor at SECMOL and co-founder of HIAL, maintained that the FCRA funds were meant for food sovereignty, where children prepared their own food through greenhouses instead of buying food from outside.

The government maintains that the changes in FCRA are aimed at plugging loopholes, improving transparency and protecting national security. However the critics contend that its approach may hinder the very essence of community empowerment and sustainable development.

…………………..

Related Articles