How Congress, which gave birth to FCRA, is now targeting the BJP govt for stopping illegal foreign funding to NGOs

Today, the Congress party accuses the Modi government of weaponising the Foreign Contribution Regulation Act (FCRA) to strangle civil society groups and non-governmental organisations (NGOs). Listening to the claims of the top leaders, one might be misled into believing that the scrutiny over foreign donations was PM Modi’s invention to curb ‘political dissent’.

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This could not be further from the truth. The foundation stone of the FCRA was laid by Prime Minister Indira Gandhi during the height of the Emergency in 1976. The objective was to regulate the inflow and utilisation of foreign funds.

Its structural reinforcement was carried out by her son Rajiv Gandhi in the mid-1980s. FCRA’s most sweeping transformation into a far more lethal weapon took place under Prime Minister Dr Manmohan Singh and Union Home Minister P. Chidambaram.

This reflects Indian political governance in many ways. When in Opposition, Congress champions the freedom of civil society groups, but when in power, it views foreign-funded NGOs as potential instruments of foreign influence.

Indira Gandhi and the FCRA

To understand the roots of the FCRA, one must travel back to 1976. India was in the grip of the Internal Emergency imposed by Prime Minister Indira Gandhi. Civil liberties were suspended, opposition leaders were imprisoned under MISA (Maintenance of Internal Security Act), and the press was heavily censored. It was during this period of centralisation that the original Foreign Contribution (Regulation) Act, 1976 was rushed through Parliament.

The text of the 1976 Act explicitly banned foreign hospitality and foreign donations for:

• (a) candidate for election,
• (b) correspondent, columnist, cartoonist, editor, owner, printer or publisher of a registered newspaper,
• (c) [Judge], Government servant or employee of any corporation,
• (d) member of any legislature,
• (e) political party or office-bearer thereof.

The inclusion of journalists in a statutory blacklist highlighted the intent of Indira Gandhi. The motive was to prevent political dissidents, satire-writers, independent journalists and civil rights groups from receiving external financial backing. In that way, she ensured that the government retained a monopoly over financial survival in public life during the Emergency.

Amendments by Rajiv Gandhi

Following the end of the Emergency and the brief tenure of the Janata Party government, the Congress returned to power. By 1984, under Prime Minister Rajiv Gandhi, the State turned to the FCRA to expand executive authority.

In 1985, the Rajiv Gandhi administration amended the FCRA and introduced major structural shifts. Earlier, associations could accept foreign contributions subject to prior information or general authorisation. The 1985 amendment made formal registration with the Ministry of Home Affairs (MHA) mandatory for any organisation seeking foreign funds.

This amendment shifted the FCRA into a permanent, bureaucratised regulatory regime over NGOs.

What happened during the UPA era

In 2010, the Congress-led United Progressive Alliance (UPA) government, headed by Dr. Manmohan Singh with P. Chidambaram holding the Home Portfolio, introduced a new, far more restrictive version of the statute: The Foreign Contribution (Regulation) Act, 2010.

The UPA repealed the 1976 Act entirely, replacing it with a framework designed to give the government greater discretionary control over NGOs.

FCRA 1976 (Old Law)FCRA 2010 (UPA Version)Permanent Registration (Life-long validity)5-Year Expiration & Renewal mandatory Focus on Electoral /Political CandidatesFocus shifted to Organizations of a Political NatureUncapped Administrative ExpenditureMandatory 50% Cap on Administrative SpendingDeemed Permission after 90 daysExecutive discretion; no automatic deemed approval

Under the 1976 Act, an FCRA registration, once granted, was permanent unless explicitly revoked. The UPA’s 2010 Act abolished permanent registration. Instead, it made registrations valid for only 5 years. This single modification gave the bureaucracy a mechanism to pause, delay or decline the licenses of NGOs without explicitly proving illegal activity.

Section 5 of the UPA’s 2010 Act introduced a category dubbed ‘Organisations of a Political Nature.’ The UPA gave executive agencies sweeping power to disallow foreign funds for groups organising public demonstrations against state policies, infrastructure projects etc.

Section 8 of the 2010 Act introduced a statutory cap, limiting the use of received foreign funds for “administrative expenses” to a maximum of 50%. In this way, the government obtained financial leverage over the operational budgets, salaries, and research overheads of non-profit entities.

The Kudankulam Clash: When the UPA Cracked Down on NGOs

The legislative provisions of the 2010 Act were put to use during the second term of the UPA government. Between 2011 and 2013, the Manmohan Singh administration faced public opposition to major industrial, infrastructure, and energy projects, including the Kudankulam Nuclear Power Plant in Tamil Nadu and field trials for Genetically Modified (GM) crops.

The grassroots anti-nuclear protests at Kudankulam, led by the People’s Movement Against Nuclear Energy (PMANE), delayed the commissioning of the Russian-built nuclear reactors. Frustrated by the delays, the highest levels of the UPA government publicly blamed foreign funds for orchestrating the protests.

In an interview, Prime Minister Dr Manmohan Singh explicitly targeted foreign-funded non-profits:

“You know what’s happening in Koodankulam…The atomic energy programme has gone into difficulties because these NGOs [non-governmental organisations], mostly I think based in the United States, don’t appreciate the need for our country to increase the energy supply…There are NGOs, often funded from the United States and the Scandinavian countries, which are not fully appreciative of the development challenges that our country faces”

The UPA Home Ministry revoked or cancelled the FCRA registrations of nearly 4,000 NGOs. The Home Ministry ordered bank account freezes and financial audits of groups accused of funding the Kudankulam agitations.

Several foreign nationals associated with environmental groups were deported or denied entry visas because they were violating visa conditions by participating in local anti-development protests.

Even ex-Home Minister P. Chidambaram had made similar statements during the Kudankulam anti-nuclear protests:“Investigation reveals that there appears to be diversion of funds. Therefore, under the Foreign Contribution Act, we have decided to register cases.”

Conclusion

The statutory tools used today to audit, suspend, restrict, or cancel FCRA licenses were built brick-by-brick across decades. The framing by the Congress party suggests that it is a recent invention.

The Foreign Contribution (Regulation) Act (FCRA) legislation and its subsequent amendments introduced under the BJP government (including major overhauls in 2020 and 2026) were designed to prevent foreign governments and organisations from using financial leverage to influence domestic politics, policy decisions or social movements.

Enhanced tracking helps ensure foreign funds are not diverted toward destabilising activities, such as promoting extremism, funding illegal religious conversions or financing radical outfits within India.

While Congress is today opposed to the FCRA Amendment Bill, it has conveniently forgotten how the legislation came into existence in the first place and underwent major changes during its rule.

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