Dated- 29^th May, 2021                                                                

To,

Shri Amit Shah Ji,

Honorable Home Minister, 

GOI,

New Delhi.

Respected Sir,

 

Sub: Drastic changes made in FCRA and related rules relating to Charitable and Religious Trusts (Trusts/NGOs) are  not proper and causing undue hardship to NGOs.

 

In the larger interest of thousands of NGOs in India having registration under FCRA who are carrying out excellent work of reaching out to down trodden and supporting them in innumerable ways, we propose to bring to your notice the following:-

 

As per the Foreign Contribution (Regulation) Amendment Act 2020, drastic changes are made in the FCRAct 2010 (amendments made in Sept. 2020). Though intention of the Ministry may be to curb misuse of certain provisions, the amendments will cause /are causing lot of hardship to thousands   of religious and charitable institutions (NGOs), to say the least, and therefore need reconsideration. We are giving herein below these amendments and our suggestions:-

1. Amendment to provisions relating to compulsory opening of bank a/c with SBI Branch at New Delhi –
2. NGOs having offices in different states or union territories are registered under FCRA.
3. Their offices may be at Kanyakumari, Karnataka, Madhya Pradesh, Goa etc. These places are far away from New Delhi.
4. Forcing all such organizations to open FCRA Account in only one branch of SBI at New Delhi is most illogical and unreasonableproposition for the following reasons-
5. For NGO having office and activities in states of Karnataka or Tamil Nadu, Kerala or at such places which are far away from New Delhi is totally impractical and mindless proposition.
6. No sensible person can think of opening and operating bank account at place thousands of kilometers away from its office or area of operation.

• Earlier also Foreign Contribution was received in schedule bank which was approved by FCRA wing of your ministry.

1. Barring few exceptions, most of these NGOs are filing annual returns (along with copies of audited accounts and copies of bank accounts) as required by FCRA and thus full information about their activities is available to Home Ministry.
2. There are several provisions in the FCRA which give more than adequate power to FCRA wing (Home Ministry) to question, trace, control and stop misuse of Foreign Contribution by any NGO which is either registered or having prior permission from home ministry.
3. Percentage of NGOs which may be resorting to misuse of funds may not be more than 2 or 3 %.

• In cases of misuse of any of the provisions of FCRAct and Rules, FCRA wing of Home Ministry can take necessary and appropriate action against such NGOs. But  such harsh and unreasonable provision  is going to adversely affect and pose too many administrative problems while opening and thereafter  operating bank a/c. at New Delhi Main Branch of SBI for  most of   the NGOs registered/having prior permission   under FCRA .
• It is a common sense that any person or organization opens bank account in vicinity of its area of activity/operation.

1. Asking NGOs to open a/c in a branch thousands of kilometers away is neither sensible, nor justifiable under any circumstances.
2. It is causing / it will cause unnecessary hardship to all NGOs who are being compelled by your FCRA wing to have account with New Delhi branch of SBI.
3. It may be convenient for people residing/having office near SansadBhavan to open and operate bank account at specified New Deli Branch ,but it is not at all convenient to NGOs having office in MP , Kerala , Tamil Nadu ,Orissa (this list can go on and on)or such faraway states, and law makers should always think about convenience and ease of operation not to officers of home ministry, but should think from ease of operation for NGOs who are having offices and activities at thousands of kilometers away from New Delhi.

• When NGO is having A/c for receiving Foreign Contribution in any branch of scheduled bank (which is again approved by FCRA wing) as per old provisions,why it should be compelled to open account in branch of SBI on Sansad Marg at New Delhi.

Therefore it is Suggested that –

• Old position which was running smoothly be reintroduced and new amendment compelling NGOs to open FCRA Account in NDMB  of SBI at New Delhi  should be scrapped in toto as it is totally impractical amendment; or
• If Home Ministry wants FCRA Account to be opened with SBI only NGOs should be permitted to open account with nearest/convenient branch of SBI and they should not be compelled to open a/c with New Delhi Branch of SBI. Bank Accounts which are presently opened with New Delhi branch can be transferred to SBI branch nearest or convenient to the NGO, it is as simple as that.

 

2. Another needless and harmful amendment is relating to reducing % age of administrative expenses to 20% from 50 % –

Intention of ministry that maximum amount of foreign contribution to be spent on activities of charitable or religious (permitted nature) is laudable. However it needs to be pointed out that no organization can carry out activities of meaningful level-scale unless and until it has proper-substantial administrative staff and set up.  Therefore incurring expenditure on administration is unavoidable. Especially in large NGOs percentage of such expenditure could be high, and there is nothing illegal about it. It needs to be recognized and understood that big or small organization carry out lot of work of social welfare and reach to the downtrodden people. They have to incur substantial amount of expenditure on administration. Reducing the limit drastically from old 50% to 20 % is totally unjustified.

Therefore it is suggested that, if at all reduction is thought desirable it can be reduced to 40 % but bringing it down all the way to 20% is very harsh, unwarranted and unjustified measure.

 

3. Not allowing registered organizations to pay Foreign Contribution money to another registered organization is also amendment without any logic as these transfers and subsequent use of money were being reported to Ministry earlier also. As such there was no point in bringing this amendment. Therefore old position should be restored.As,it should be noted that, for carrying out large welfare projects,large and small or different organizations situated at different places in different states do join hands, and to facilitate their work it is absolutely essential that such inter NGO transfer of Foreign Contribution should be permitted as before.
4. In the final analysis one will have to say all the recent amendments made to FCRA Act and Rules are unwarranted, poorly thought out and need to be scrapped otherwise they will result in causing unintended hardship to NGOs registered with home Ministry under FCRA Law and carrying out excellent work in their chosen field.
5. In fact role of government should have been of providing handholding and support to such organizations, whereas it appears that all these amendments made in Sept. 2020, will cause serious problems at functional and administration level to all such organizations which are having registration or prior permission under FCRA Law.
6. Most of the amendments as mentioned above are not rational, will put (or result in putting) unnecessary administrative or compliance burden on NGOs, they are illogical enough and going to adversely affect (or are adversely affecting) NGOs.

Therefore in the interest of thousands of NGOs (either registered with or having prior permission from FCRA wing) and in the interest of downtrodden and weaker section of public for which they work – we hope you will consider our suggestions favorably.

Thanking You.

Best Regards

CA Shailesh R Ghedia

President:Mumbai BJP Professional Cell

Mobile: 9869437888

CC to:

Shri Devendra Fadnavis Ji

Leader of Opposition,

Maha Legislative Assembly.

 

CA ShriArunsinghJi, MP

BJP National Gen Secretary

 

Adv Shri MangalPrabhatLodhaJi, MLA

President, Mumbai BJP.

 

Shri Gopal Shetty Ji, MP

 

Smt. Poonam Mahajan Rao Ma’am, MP

 

ShriManojKotakJi, MP

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