Supreme Court starts hearing plea against FCRA changes

Asia's Tech News Daily

ngo, supreme court, foreign contribution regulation act, kyc, india, fcra

The Supreme Court began hearing a petition challenging the latest changes in the Foreign Contribution Regulation Act (FCRA) which many non-governmental organisations (NGOs) say have squeezed their funds.

The changes have made it mandatory for all NGOs to have their primary bank account in Delhi and reduced the percentage of funds that can be used by them for administrative expenses from 50% to 20%. Further, the purposes for which foreign contribution can be received have been restricted. These provisions have been challenged in SC. A bench led by Justice AM Khanwilkar is hearing the petition.

The Act has made it mandatory for all officer-bearers of an NGO to show Aadhaar as their identification. Bank KYC has also been linked to Aadhaar. Besides, the amended law has barred NGOs which received foreign funds from sub-granting the amounts they received to other NGOs which worked at the grassroots.

The plea was filed by Neol Harper of NGO Care and Share Charitable Trust. The NGO has challenged sections 7, 12A, 12(1A) and 17 brought in by the 2020 amendments as ultra vires of Articles 14, 19 and 21 of the Constitution.

The SC had earlier issued notices on the plea. In response, the Centre had claimed the right to life and liberty did not include the right to receive unregulated foreign regulations.

Solicitor general Tushar Mehta told the court that most NGOs had already complied with the regulations. Of the 23,000 registered NGOs, 19,000 had complied, he said.

Mehta defended the changes, saying they were required to ensure that there was proper utilisation of funds coming into India. However, he sought more time from the court to defend the amendments. Appearing for the NGO, senior advocate Gopal Shankarnarayan argued the changes in the law had made it difficult for donors to donate to Indian NGOs. Further arguments in the case will continue after Diwali.

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