Amit Shah introduced the Foreign Contribution Regulation Amendment Bill, 2026 in Lok Sabha to address gaps in the 2010 FCRA law, especially managing foreign funds and assets after cancellation or lapse.
NEW DELHI: Union Home and Cooperation Minister Amit Shah has introduced the Foreign Contribution (Regulation) Amendment Bill, 2026 in the Lok Sabha. The draft law aims to address “operational and legal gaps” in the 2010 Act, particularly concerning management of foreign funds and assets when an organisation’s FCRA registration is cancelled or lapses.
1) Government takeover of NGO assets: A major change would allow the government to assume control of foreign funds and assets if an NGO’s FCRA registration is cancelled, surrendered or not renewed.
“The foreign contribution and the assets created out of foreign contribution… shall… vest provisionally in the Designated authority.”
If the organisation fails to obtain a fresh certificate, that provisional control would become permanent.
“If the person…fails to obtain a fresh certificate…the foreign contribution and the assets…shall thereupon stand permanently vested in the Designated authority.”
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2) Power to use or sell assets: The Bill also empowers the government to use or dispose of such assets.
“The Designated authority shall apply the foreign contribution and the assets permanently vested in it for public purposes…”
This provision enables the State to repurpose NGO assets for public use, including selling or transferring them.
3) Automatic loss of licence: The Bill clarifies the circumstances in which an NGO’s licence will lapse, removing uncertainty present in the current statute.
“The certificate shall be deemed to have ceased on the expiry of its period of validity if… the application for renewal has not been made… [or]… refused…”
On expiry or refusal to renew, the organisation immediately loses the right to receive or handle foreign funds.
During suspension (prior to cancellation), the Bill tightens restrictions, requiring NGOs to:
“…not alienate, encumber or otherwise deal with any asset created out of the foreign contribution, except with the prior approval of the Central Government.”
This prevents NGOs from disposing of or transferring assets while an inquiry or suspension is in effect.
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4) Lower punishment, wider accountability: The Bill reduces the maximum prison term for violations but expands individual accountability.
Penalties are softened to:
“…shall be punished with imprisonment for a term which may extend to one year, or with fine, or with both.”
This is a reduction from the current maximum penalty of five years.
At the same time, the Bill broadens liability by holding office-bearers personally responsible.
“Every key functionary…shall be deemed to be guilty of the offence…”
Thus, directors, trustees, partners and other officials can be prosecuted personally unless they can demonstrate lack of knowledge or that they exercised due diligence. In short, penalties are lighter but responsibility is placed directly on those who run the organisation.
Rationale for the amendments:
The Bill’s Statement of Objects and Reasons explains the need for change as arising from “…multiplicity of investigations, inconsistency in penalties, absence of timelines for utilisation, lack of express provision for cessation of registration, and ambiguity regarding treatment of assets during suspension have resulted in implementation challenges.”
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