FCRA 2010: New Rules, Foreign Funding Regulation & Important Current Affairs MCQs 2026
FCRA 2010: New Rules, Foreign Funding Regulation & Important Current Affairs MCQs 2026
The Foreign Contribution (Regulation) Act, 2010, commonly known as the FCRA, is an important law governing the receipt and utilisation of foreign contributions and foreign hospitality in India.
The Act applies to individuals, associations and Non-Governmental Organisations (NGOs) receiving foreign contributions. Its broader purpose is to ensure that foreign funding does not adversely affect India's sovereignty, integrity, security, public interest or democratic institutions.
The Ministry of Home Affairs has proposed stricter FCRA rules, bringing greater emphasis on the nature of activities undertaken using foreign funds, geographical limits on operations, transparency requirements and the eligibility of key functionaries.
What is the Foreign Contribution (Regulation) Act?
The Foreign Contribution (Regulation) Act, 2010 regulates the receipt and utilisation of foreign contributions and hospitality by individuals, associations and NGOs.
The law seeks to ensure that foreign funding is used in a manner consistent with India's national interests and does not negatively affect sovereignty, integrity, security, public interest or democratic institutions.
Key Changes Proposed in FCRA Rules
Activity-Based Regulation: Foreign funds would be restricted to approved activities falling within specified categories.
Geography-Based Compliance: NGOs would be permitted to operate only in the States or Union Territories declared for their activities.
Enhanced Transparency: Disclosure requirements would include social media accounts, websites, publications and details of key functionaries.
Religious Activities: Religious activities may be permitted, but proselytisation, meaning activities related to religious conversion, is explicitly prohibited under the proposed framework discussed in the material.
Expanded Definition of Key Functionary: The definition would include persons such as trustees, partners, governing body members and directors.
Foreign Nationals: Foreign nationals serving as key functionaries would generally be ineligible for FCRA registration unless exempted by the government.
FCRA Amendment Act, 2020
The FCRA Amendment Act, 2020 further strengthened regulation of foreign funding. According to the material, three important changes were the prohibition on sub-granting, reduction of the administrative expenditure limit to 20% and the requirement of a designated State Bank of India account for foreign contributions.
Quick Revision Points
Full Form: Foreign Contribution (Regulation) Act
Year: 2010
Concerned Ministry: Ministry of Home Affairs
Main Purpose: Regulation of foreign contributions and hospitality
Coverage: Individuals, associations and NGOs
Activity-Based Rule: Foreign funds restricted to approved activities
Geographical Rule: NGOs operate only in declared States/UTs
Transparency: Disclosure of social media accounts, websites, publications and key functionaries
Religious Activities: Permitted, but proselytisation explicitly prohibited
Key Functionaries: Includes trustees, partners, governing body members, directors, etc.
Foreign Nationals: Generally ineligible as key functionaries for FCRA registration unless government exemption applies
2020 Amendment: Banned sub-granting, reduced administrative expense cap to 20% and mandated a designated SBI account
POINT TO REMEMBER:-
Q1) FCRA stands for:
A) Foreign Currency Regulation Act
B) Foreign Contribution (Regulation) Act
C) Federal Contribution Regulation Act
D) Foreign Cooperation and Registration Act
Answer:=> B) Foreign Contribution (Regulation) Act
Explanation: FCRA stands for Foreign Contribution (Regulation) Act. The relevant legislation discussed in the material was enacted in 2010.
Q2) Which Ministry has proposed stricter FCRA rules according to the current affairs material?
A) Ministry of Finance
B) Ministry of External Affairs
C) Ministry of Home Affairs
D) Ministry of Corporate Affairs
Answer:=> C) Ministry of Home Affairs
Explanation: The Ministry of Home Affairs has proposed stricter rules under the FCRA framework.
Q3) What does the FCRA, 2010 primarily regulate?
A) Domestic corporate taxation
B) Receipt and utilisation of foreign contributions and hospitality
C) Foreign exchange trading by banks only
D) Import of agricultural goods
Answer:=> B) Receipt and utilisation of foreign contributions and hospitality
Explanation: The FCRA regulates the receipt and utilisation of foreign contributions and foreign hospitality by individuals, associations and NGOs.
Q4) The FCRA aims to ensure that foreign funding does NOT adversely affect which of the following?
1. Sovereignty
2. Integrity
3. Security
4. Democratic institutions
A) 1 and 2 only
B) 1, 2 and 3 only
C) 2, 3 and 4 only
D) 1, 2, 3 and 4
Answer:=> D) 1, 2, 3 and 4
Explanation: The Act seeks to prevent foreign funding from adversely affecting India's sovereignty, integrity, security, public interest and democratic institutions.
Q5) What is meant by Activity-Based Regulation under the proposed FCRA rules?
A) Foreign funds may be used for any activity without restriction.
B) Foreign funds would be restricted to approved activities under specified categories.
C) Only political activities may receive foreign funds.
D) Foreign funds may only be used outside India.
Answer:=> B) Foreign funds would be restricted to approved activities under specified categories.
Explanation: Activity-Based Regulation means that foreign funds can be used only for approved activities within specified categories.
Q6) Under Geography-Based Compliance, NGOs would be permitted to operate:
A) Anywhere in the world without disclosure
B) Only in declared States or Union Territories
C) Only in the National Capital Territory of Delhi
D) Only in border states
Answer:=> B) Only in declared States or Union Territories
Explanation: The proposed geography-based compliance requirement limits NGO operations to the States or Union Territories declared under the framework.
Q7) Which of the following may have to be disclosed under the enhanced transparency requirements?
1. Social media accounts
2. Websites
3. Publications
4. Key functionaries
A) 1 and 2 only
B) 2 and 3 only
C) 1, 2 and 3 only
D) 1, 2, 3 and 4
Answer:=> D) 1, 2, 3 and 4
Explanation: Enhanced transparency requirements include mandatory disclosure of social media accounts, websites, publications and key functionaries.
Q8) Which of the following statements about religious activities under the proposed FCRA rules is correct?
A) All religious activities are prohibited.
B) Religious activities are allowed, but proselytisation is explicitly prohibited.
C) Proselytisation is allowed without restriction.
D) FCRA has no relevance to religious activities.
Answer:=> B) Religious activities are allowed, but proselytisation is explicitly prohibited.
Explanation: The material states that religious activities may be allowed, while proselytisation, meaning conversion-related activities, is explicitly prohibited.
Q9) In the context of the FCRA rules, proselytisation refers to:
A) Foreign trade promotion
B) Religious conversion-related activities
C) Political campaigning
D) Charitable healthcare services
Answer:=> B) Religious conversion-related activities
Explanation: The source specifically explains proselytisation as activities related to religious conversion.
Q10) Which of the following may fall within the expanded definition of "Key Functionary"?
1. Trustees
2. Partners
3. Governing body members
4. Directors
A) 1 and 2 only
B) 2 and 4 only
C) 1, 2 and 3 only
D) 1, 2, 3 and 4
Answer:=> D) 1, 2, 3 and 4
Explanation: The expanded definition of Key Functionary includes trustees, partners, governing body members, directors and similar persons.
Q11) What is the general position regarding foreign nationals serving as key functionaries under the proposed rules?
A) They are always eligible without restriction.
B) They are generally ineligible for FCRA registration unless exempted by the government.
C) Only foreign nationals may become key functionaries.
D) The government has no role in granting exemptions.
Answer:=> B) They are generally ineligible for FCRA registration unless exempted by the government.
Explanation: Foreign nationals acting as key functionaries are generally considered ineligible for FCRA registration, although the government may grant an exemption.
Q12) Which of the following was introduced by the FCRA Amendment Act, 2020?
A) Permission for unrestricted sub-granting
B) Ban on sub-granting
C) Removal of all administrative expenditure limits
D) Removal of banking requirements
Answer:=> B) Ban on sub-granting
Explanation: The FCRA Amendment Act, 2020 strengthened the regulatory framework by banning sub-granting of foreign contributions.
Q13) The FCRA Amendment Act, 2020 reduced the administrative expenditure cap to:
A) 10%
B) 20%
C) 30%
D) 50%
Answer:=> B) 20%
Explanation: The 2020 amendment reduced the permissible administrative expense cap to 20%.
Q14) The FCRA Amendment Act, 2020 mandated a designated account for foreign contributions with which bank?
A) Reserve Bank of India
B) Punjab National Bank
C) State Bank of India
D) Bank of Baroda
Answer:=> C) State Bank of India
Explanation: One of the major provisions highlighted in the material is the requirement of a designated State Bank of India account for foreign contributions.
Q15) Consider the following statements regarding FCRA:
1. It regulates foreign contributions received by individuals, associations and NGOs.
2. The 2020 amendment banned sub-granting.
3. The administrative expenditure cap was reduced to 20%.
4. A designated SBI account was mandated for foreign contributions.
Which of the statements given above are correct?
A) 1 and 2 only
B) 1, 2 and 3 only
C) 2, 3 and 4 only
D) 1, 2, 3 and 4
Answer:=> D) 1, 2, 3 and 4
Explanation: All four statements are correct according to the material. FCRA regulates foreign contributions and hospitality, while the 2020 amendment strengthened regulation through a ban on sub-granting, a 20% administrative expenditure cap and a designated SBI account requirement.
Why is FCRA Important?
Foreign funding can support social, charitable and developmental activities, but it can also raise concerns regarding transparency, accountability and national interest. The FCRA provides the legal framework through which such foreign contributions are regulated.
The proposed stricter rules highlighted in 2026 focus strongly on transparency, geographical and activity-based compliance and greater scrutiny of the individuals responsible for organisations receiving foreign funding.
FCRA 2010 vs FCRA Amendment Act 2020 – Quick Understanding
The FCRA, 2010 provides the basic framework for regulation of foreign contributions and hospitality. The FCRA Amendment Act, 2020 strengthened this framework by introducing additional restrictions and compliance requirements, including the ban on sub-granting, reduction of the administrative expenditure cap to 20% and the requirement of a designated SBI account.
Conclusion
The Foreign Contribution (Regulation) Act, 2010 plays an important role in regulating foreign funding received by individuals, associations and NGOs in India. Its objective is not merely financial regulation but also protection of sovereignty, integrity, security, public interest and democratic institutions.
For competitive examinations, remember the most important points: MHA, FCRA 2010, activity-based regulation, geography-based compliance, enhanced transparency, prohibition on proselytisation, expanded key functionary definition, 20% administrative expense cap, ban on sub-granting and designated SBI account.
