• The FCRA Amendment Bill, 2026, introduced in the Lok Sabha on 25 March 2026, proposes a Designated Authority to manage foreign-funded assets when an organisation’s FCRA registration is cancelled, surrendered, or ends.
• The government says this prevents misuse of foreign-funded assets, while civil society and Opposition parties fear excessive government control and executive overreach. The Bill has been referred to a Joint Parliamentary Committee (JPC).

Background: What FCRA Already Does

• The FCRA has long empowered the State to scrutinise foreign funding: registrations can be withdrawn or cancelled for non-compliance, with penalties for diversion or misappropriation.
• Section 15 of FCRA, 2010 already provides for foreign-funded assets to vest in a prescribed authority upon cancellation/surrender — but the bare provision lacked operational detail. States said they could not take possession of, maintain, or manage these assets.
• Over the last decade, nearly 20,000 registrations were cancelled and about 15,000 deemed ceased, leaving thousands of crores of foreign assets in limbo — so the Bill creates detailed machinery for the existing vesting idea, it does not invent it.

• Designated Authority: A new authority will control and manage foreign-funded assets when FCRA registration ends.
• Automatic Cancellation: Registration lapses automatically if it expires, is not renewed, or renewal is rejected.
• Asset Vesting: Assets first transfer temporarily to the Authority; if registration is restored they may be returned, otherwise permanently vested for public purposes.
• Management of Organisation: In the public interest, the Authority may also manage the organisation’s activities.
• Places of Worship: Religious assets must retain their religious character.
• Mixed-Funded Assets: The whole asset may initially vest, even if only partly funded from foreign sources.
• Wider Coverage: More people — directors, trustees, partners, HUF karta — can be treated as key functionaries.

The Core Constitutional Problem

• Expansion of Consequences: Earlier, losing registration meant losing eligibility for foreign funds; now it could extend to provisional management and permanent vesting/disposal of assets.
• Ownership vs. Control: Even if formal ownership stays with the NGO, a shift in management control to a government authority fundamentally alters the institution-State relationship — control matters more than title.
• No Exit Without Loss: An organisation cannot exit the FCRA framework without losing assets created from foreign funds.

• The Proportionality Test: The Supreme Court (Modern Dental College 2016, Puttaswamy 2017) has held that even for a legitimate objective, means must be reasonably connected and balanced against the burden on rights — the Bill’s safeguards must be tested for sufficiency.
• Excessive Delegation: The Bill hands wide discretion to the executive (“necessary or expedient in public interest” is vague), raising the risk of arbitrary action under Article 14.
• Due Process Concerns (Article 21): The Authority can take control through an administrative process without prior judicial adjudication, raising natural justice concerns.
• Right to Property (Article 300A): Permanent vesting/disposal of assets must meet the test of a fair, just and reasonable law.
• Freedom of Association (Article 19(1)(c)): Excessive control over NGOs can chill civil society activity.
• Federalism Dimension: Existing Section 15 vested assets in State authorities; the new central “Designated Authority” shifts control to the Union — Tamil Nadu, Nagaland and Mizoram have raised objections.
• Retrospective Application: The Bill initially proposed applying the framework retrospectively to already-vested assets, raising fairness concerns.

Recent Development

• Amid sustained opposition, the Centre moved to refer the Bill to a 31-member Joint Parliamentary Committee (21 Lok Sabha + 10 Rajya Sabha), with its report expected by the Winter Session — allowing detailed scrutiny of the Designated Authority’s powers and safeguards.

The FCRA Amendment Bill, 2026 must balance national security with civil liberties and an independent civil society. While regulating foreign funding is necessary, excessive executive control over organisations and their assets must be avoided — clear rules, proportionality and strong safeguards are essential, and the JPC’s scrutiny should ensure this balance.