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Ministry of Home Affairs & the Institute of Chartered Accountants of India jointly organized a seminar on FCRA at Vigyan Bhavan on 24-25th June, 2005. The basic purpose of the seminar was to create awareness amongst various stakeholders viz. NGOs, bankers, chartered accountants, donors etc. regarding various provisions of FCRA and to invite suggestions for improvement in the functioning of FCRA wing of MHA as well as for proposed new Act which will replace the existing Act.
2. The seminar, first of its kind, was inaugurated by Hon’ble Union Home Minister Shri Shivraj Patil on 24th June, 2005. Hon’ble Sri Prakash Jaiswal, Minister of State in Home Affairs was also present in the inaugural session. Six technical sessions were conducted during the seminar for the benefit of participants. The valedictory address was delivered by Hon’ble Union Finance Minister Shri P. Chidambaram on 25th June, 2005. Over 500 delegates from all over the country from different cross sections like NGOs, banks, chartered accountants, major donors, lawyers, academicians, representatives of Embassies/High Commissions and officers from Central and State Governments participated in the Seminar.
3. During his inaugural address, Hon’ble Union Home Minister emphasized the need for bringing in a new legislation to replace the existing FC(R) Act, 1976 with a view to facilitate inflow of foreign contribution for genuine activities without compromising the national security concerns. He informed that the draft Bill in this regard has been prepared and the same has been referred to a Group of Ministers for deliberations and giving a final shape. The draft Bill recommended by GoM will be placed before the Parliament after obtaining approval of the Cabinet. He called upon all the stakeholders to give their views/suggestions in this regard and said that the draft Bill will be uploaded on MHA’s website for seeking free and frank views. Further, the Bill may be referred to the Standing Committee of the Parliament and will thereafter be discussed in both the Houses. Therefore, the Bill will be finalized after detailed consultation. He emphasized that the Bill should be formulated by ensuring a proper balance between twin competing objectives of facilitating NGOs for flow of foreign funds and at the same time addressing the security concerns.
4. During the seminar several issues pertaining to receipt and utilization of foreign contribution were deliberated upon by the delegates and eminent speakers. Items like allowing multiple bank accounts for utilization of foreign contribution, need to reduce delay in disposal of applications for grant of registration/prior permission under the Act, need to simplify the existing forms, on-line submission of application forms and returns as e-application and e-returns, communicating the reasons for rejection of application etc. came up during the seminar, for which MHA will initiate necessary action within the existing legal framework.
5. Many suggestions regarding the proposed Act like provision for appeal, giving management outlook to the new Act etc. and specific ideas for improvement in the functioning of FCRA wing of MHA were received. Hon’ble Home Minister and Home Secretary assured that all these suggestions/views will be documented and duly considered by the Ministry for inclusion in the proposed Bill. During the seminar, it emerged that many associations were committing various lapses due to lack of adequate knowledge and familiarity with the provisions of the Act. The delegates expressed their happiness for the initiative taken by MHA and ICAI for conducting this seminar which provided them an opportunity to learn various aspects of the legislation.
6. The valedictory address was delivered by Hon’ble Shri P. Chidambaram, Union Finance Minister who while commending the initiative taken by MHA & ICAI dwelled upon various aspects of important financial legislation like, FCRA, PMLA, FEMA etc. and emphasized the need for greater awareness & compliance of the law. He said that these three enactments are designed to achieve different objectives. However, all these are concerned with regulation of capital flow. In the present worldwide scenario flow of capital in private accounts has grown over few hundred billions of dollars. Therefore, the law like FCRA becomes very important to ensure that such flow does not lead to disturbing the security of a country. He emphasized that accounting and reporting are essential ingredients of FCRA compliance and should not be construed as invasion or intrusion on the NGOs rights. He said that we value civil societies’ contribution in national development and would like them to cooperate with the government in ensuring that foreign receipts are not diverted or misutilised.
OK/AD/MM
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