FCRA amendment in 2020 to discourage NGOs from spending on posh buildings and luxurious vehicles: MHA annual report

• In a report, the Home ministry recently said that the FCRA was amended in 2020 to discourage expenditure by NGOs on “unproductive items” such as inflated staff salaries and luxury vehicles.
• Would help effectively monitor the receipt and utilisation of foreign contribution.

Importance of amendment

• Would help in exact identification of office-bearers and eliminate chances of benami/bogus entry through: * Aadhaar of key functionaries of NGOs * Receipt of foreign contribution through designated FCRA bank accounts with the SBI, * A complete ban on domestic transfer of foreign funds * Reduction of administrative expense limit to 20% from 50%
• Would discourage expenditure on unproductive items like: * inflated staff salaries * posh buildings * office and luxurious vehicles

Prelims Takeaway

• FCRA