FCRA – Foreign Contribution (Regulation) Act 2010 deals with the regulation and operation of foreign funds utilized by various organizations in India. It is done to protect the sovereign boundary of India from preventing any malicious activities by foreign funds endangering “national interest.”
The recent Foreign Contribution (Regulation) Amendment Bill, 2020, saw stringent control over the financial administration of foreign funds. The opposition called it the ‘death of civil society.’ The act may discourage several existing NGOs to operate their function. The opposition also called out on “PM CARES Fund,” which was exempted from FCRA.
The Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES) has got exemption under the FCRA provisions, and a separate account for receiving foreign donations has been opened. This enables PM CARES Fund to accept donations and contributions from individuals and organizations based in foreign countries.
According to The Hindu Report, Details and documents on the exemption of PM CARES Fund under the Right to Information (RTI) Act, and the Ministry of Home Affairs (MHA), in its response, has said that it had to first “seek the consent” of PM-CARES before giving out the information. Furthermore, the information sought is considered a “third party” under the RTI Act, the Home Ministry added.
In June, RTI activist Commodore Lokesh Batra (retired) filed a request with MHA asking for details of exemption, to which MHA responded on August 19, referring to Section 8(1)(e), which allows the denial of information “available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrants the disclosure of such information.”
Provision of FRA concerning organizations:
Under the FCRA 2010, all companies, associations, societies as well as NGOs are entitled to obtain foreign funds provided; they meet certain eligibilities such as registration within several acts and minimum operation of 3 years. Organizations that wish to receive foreign donations must have a definite cultural, economic, educational, religious, or social program.
The act also exempts election candidates, editor or publisher of a newspaper, judges, government servants, members of any legislature, and political parties from obtaining foreign donations.
The act permits the Central Government to issue orders exempting any organization (apart from political parties) constituted or established by or under a Central a State Act or by any administrative or executive order of the Central or any State Government from the provisions of FCRA if it feels it necessary or expedient in the public interest.
By using the above power, the Home Ministry exempted PM CARES Fund recently. The government justified that the PM CARES Fund would better serve the public interest by not being subject to the law.
PM CARES FUND:
The PM CARES Fund was created to utilize the fund for combating, and containment and relief efforts against the coronavirus outbreak.
Interestingly, the Home Ministry in January 2020 issued an order which made organizations that are given exemptions from the provisions of the FCRA must be compulsorily audited by the Comptroller and Auditor General of India (CAG) or any of the agencies of the CAG.
However, PM CARES Fund is not being audited by CAG, but by an independent auditor.
It is seen that the PM CARES Fund is a public charitable trust under the Registration Act of 1908. It is not set up through the Central or State Act. As per the Supreme Court’s ruling, the trust does not receive any budgetary support or government money. Hence, we see an independent audit instead of the CAG.
The PM CARES Fund, though, does not seem to meet the prerequisites of being a body owned and established by the government whose accounts are exempted from FCRA audited by the Comptroller and Auditor-General (CAG); this controversy of PM CARES Fund has raised the question of its accountability and scrutiny.