India’s NGOs at a new funding crossroads

When the first Foreign Contribution Regulation Act (FCRA) was passed in 1976, a government of a different political hue was in power from the one that has now proposed the more fierce FCRA Amendment Bill, 2026. But the underlying political apprehensions were similar — the fear that foreign powers could destabilise the country by funding civil society organisations (non-governmental organisations or NGOs). In the present case, there is also an unstated fear of religious conversions by Christians and other religious minorities. The Bill is yet to be enacted because of strong reactions by the Opposition parties and several civil society groups, particularly Christian organisations.

The government claims that the flow of foreign funds into India’s NGO sector operates as a vast, intricate and opaque web. Under the banners of development, human rights and social welfare, thousands of crores of unmonitored capital pour into the country every year. Much of this money deliberately bypasses state accounting mechanisms and finds its way into politically charged campaigns, highly selective local advocacy, and aggressive proselytisation and religious conversion networks.

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Proposed legislation, the concerns

Under the proposed legislation, if an FCRA certificate is cancelled, surrendered or automatically lapses, foreign contributions and all assets created from them would vest in a government-appointed “designated authority”. The organisation can recover the assets if registration is restored within the prescribed period. Permanent vesting will occur only if registration is not restored within that period. The Bill also provides for revision and an appeal to the District Judge.

If a fresh certificate is not obtained within the prescribed period, the assets could be sold or transferred to a government department, with the proceeds going to the Consolidated Fund of India. However, during the provisional-vesting period, restoration of registration results in the return of assets and unused foreign contribution.

NGOs, especially Christian organisations, which the government says receive a larger proportion of the funds among religions associations, are worried that the legislation may not be religion-neutral and that, ultimately, the real sufferers would be the beneficiaries served by such charitable organisations, which have established and operate numerous schools, hospitals, old-age care homes and similar institutions. As some leaders from the northeast and tribal areas have pointed out, such institutions are sometimes the largest or only providers of these services in many areas.