FCRA Amendment Bill 2026: What It Proposes, Why It Is Controversial And What Happens After JPC Referral

The Lok Sabha on Wednesday referred the Foreign Contribution (Regulation) Amendment Bill, 2026 to a Joint Parliamentary Committee (JPC), setting the stage for a detailed examination of proposed changes to the law governing foreign funding received by NGOs, charitable institutions, educational bodies, religious organisations and other entities in India.

The Bill, introduced in the Lok Sabha on March 25 seeks to amend the Foreign Contribution (Regulation) Act, 2010 (FCRA). The government has said the proposed changes are aimed at making the receipt and utilisation of foreign contributions more transparent and accountable and at addressing difficulties in managing assets created from foreign contributions when an organisation loses its FCRA registration.

The legislation, however, has faced sustained opposition from political parties, civil society organisations and religious groups, particularly over the proposed power of a government-appointed Designated Authority to take possession of, manage and eventually dispose of assets created wholly or partly from foreign contributions.

The JPC referral followed a political standoff in the Lok Sabha on Wednesday. While Congress MP K C Venugopal opposed the Bill and demanded its withdrawal, Samajwadi Party chief Akhilesh Yadav said the Opposition was united against the legislation and alleged that it targeted minorities. Parliamentary Affairs Minister Kiren Rijiju rejected the allegation, saying there was no provision in the Bill targeting any minority community.

BJP MP Jagdambika Pal, who was functioning as a Panel Chairperson while presiding over the House, pointed out that the Opposition had earlier demanded that the Bill be referred to a JPC and questioned its objection to the government now proposing the same course.

What is the FCRA?

The Foreign Contribution (Regulation) Act regulates the acceptance and utilisation of foreign contributions by individuals, associations and companies in India. Its stated objective includes ensuring that foreign contributions are not used in a manner detrimental to the national interest.

The present law dates to 2010 and replaced the Foreign Contribution (Regulation) Act, 1976. One of the major changes introduced by the 2010 law was that FCRA registration became time-bound, with certificates required to be renewed every five years. Entities that are not registered can, in specified circumstances, receive foreign contribution through the prior-permission route for a particular purpose and from a particular source.

What is the FCRA Amendment Bill, 2026 seeking to change?

The Bill proposes a comprehensive new framework for dealing with foreign contributions and assets created from such contributions when an organisation's FCRA registration ceases to remain valid. The most significant change proposed by the Bill is the creation of a Designated Authority.

It proposes inserting Section 14B to provide for cessation of an FCRA certificate when it expires, is not renewed or when renewal is refused. It also seeks to replace the existing Section 15 with a new Chapter IIIA dealing with the vesting, supervision, management and disposal of foreign contributions and assets through a Designated Authority.

Under the proposed framework, foreign contribution and assets created from it could be provisionally vested in the Designated Authority when an organisation's registration is cancelled, surrendered or ceases to remain valid.

The vesting mechanism would also apply to assets created or acquired partly from foreign contribution and partly from domestic sources. This is one of the provisions that has generated significant concern, as organisations could have assets built through a combination of foreign donations and domestic funds.

If an organisation subsequently obtains a fresh registration, renewal or restoration within the prescribed period, the Bill provides for the return of the unutilised foreign contribution and provisionally vested assets, subject to the prescribed conditions.

However, where the organisation fails to obtain, renew or restore its registration within the prescribed period, the contribution and assets can vest permanently in the Designated Authority. The Authority may then transfer or dispose of the assets for public purposes in accordance with the proposed framework.

What happens if the asset is a place of worship?

The Bill specifically provides protection for places of worship.

Where a permanently vested asset, or a portion of it, is a place of worship, the Designated Authority must entrust its management or operation to a prescribed person and ensure that its religious character is maintained. The government has cited this provision while rejecting concerns over the impact of the Bill on religious institutions.

Why has the asset provision become contentious?

The existing FCRA already contains a provision dealing with foreign contribution and assets when registration is cancelled or surrendered. The government has argued that the proposed amendment primarily seeks to create a more comprehensive statutory mechanism for taking custody of, managing and disposing of such assets, thereby addressing gaps in the present framework.

Critics, however, have raised concerns over the expanded circumstances in which the mechanism could operate. Under the Bill, expiry, non-renewal or refusal of renewal would also result in cessation of the certificate and potentially trigger the asset-vesting framework.

The issue becomes particularly significant where an organisation has used foreign contribution to create an asset but subsequently operates largely or entirely on domestic funding. Questions have also been raised over how the government would determine the foreign-funded and domestically funded portions of an asset where the two cannot be clearly separated.

Other proposed changes

The Bill also proposes to regulate the receipt and utilisation of foreign contribution under the prior-permission route by prescribing timelines for receiving and utilising such funds.

It seeks to regulate dealings with assets during suspension of an FCRA registration and proposes changes relating to the investigation of offences. Under the proposed amendment, prior approval of the Central Government would be required before an investigation into an offence under the Act is initiated.

The Bill also proposes to rationalise penalties. The existing law provides for imprisonment of up to five years, a fine, or both for contravention of the Act or its rules. The Bill proposes reducing the maximum imprisonment to one year.

Why is the Opposition opposing the Bill?

Opposition parties and religious organisations have particularly raised concerns over the potential impact on minority-run schools, hospitals, charitable institutions and places of worship. Critics have also questioned the absence of a statutory hearing and appeal mechanism against denial of renewal and the proposed vesting of assets that may have been created partly through domestic funds.

What is the government's response?

The government has rejected the allegation that the Bill targets any particular religion or minority community. The government has said its objective was to make the use of foreign contributions more transparent and accountable. It has assured institutions, including educational institutions and NGOs working in the national interest, would not be obstructed.

The government has also argued that the asset-vesting provision is not an entirely new concept. Section 15 of the existing FCRA already provides for foreign contribution and assets created from it to vest in a prescribed authority after cancellation or surrender of registration. According to the government, the Bill principally creates a detailed mechanism for taking custody of, managing and disposing of such assets, an area where the existing law lacks operational detail.

What happens now?

The referral to JPC follows months of political and stakeholder opposition. The JPC will comprise 21 members nominated by the Lok Sabha Speaker and 10 members nominated by the Rajya Sabha Chairman, making it a 31-member committee. Its report is to be submitted in the first week of the Winter Session.

The JPC referral gives Parliament an opportunity to examine the proposed asset-vesting mechanism, the powers of the Designated Authority, the consequences of non-renewal of FCRA certificates and safeguards available to organisations affected by such orders.

The committee can examine stakeholders and recommend changes to the Bill. Its recommendations, however, are not binding on the government.

The referral means the Bill will now undergo committee-level scrutiny before the government decides on its further legislative course.