Matters India Reporter
NEW DELHI, September 26, 2026: Civil society coalition Nattai Kappom (Save the Nation) has urged Parliament to reconsider provisions in the Foreign Contribution (Regulation) Amendment Bill (FCRA), 2026, warning that its asset‑vesting framework could undermine charitable institutions, minority schools, and places of worship.
Nattai Kappom, a platform of advocates, journalists, educationists and social workers, submitted a detailed memorandum to the Joint Parliamentary Committee on September 25.
The group argued that while transparency and accountability in foreign contributions are legitimate goals, the proposed law “creates a mechanism by which the property and institutional assets of a charitable organisation may ultimately be taken over, managed, transferred or disposed of following cessation of its FCRA certificate.”
The memorandum highlighted concerns with Section 14B, which deems an FCRA certificate to have ceased if renewal is not sought or granted.
The group warned that non‑renewal could trigger asset vesting “even where there has been no finding of fraud, diversion or criminal misuse.”
It recommended deleting the clause or ensuring due process, notice, and appeal rights before any adverse action.
The most serious objection was to Section 16A, which allows provisional and permanent vesting of assets in a Designated Authority.
Nattai Kappom cautioned that schools, hospitals, hostels and service centers built with foreign funds but sustained through domestic resources could be seized.
“Property created partly from domestic resources should not be permanently vested merely because a portion of its original cost was financed through foreign contribution,” the memorandum stated.
The coalition also raised practical difficulties in separating assets created partly from foreign and partly from domestic funds.
For example, a hospital built with 40 percent foreign donations and 60 percent Indian contributions could not be physically divided. The memorandum urged statutory safeguards to prevent disproportionate seizures.
Further, the group opposed provisions allowing permanently vested assets to be sold or transferred to government authorities, with proceeds credited to the Consolidated Fund of India.
It argued that charitable property accumulated through decades of domestic donations and voluntary labor should not be lost merely due to FCRA cessation.
Special concerns were voiced for “places of worship” and “minority educational institutions” protected under Article 30 of the Constitution. The memorandum said automatic vesting could infringe on religious freedoms and minority rights.
It recommended excluding such institutions from permanent vesting unless fraud or serious misuse is proven, and only after judicial review.
Other issues included confidentiality of sensitive records under Section 16F, concentration of powers in the Designated Authority under Section 16G, and ineffective appeals under Section 16K if property is disposed of before cases are decided.
The group also sought clearer distinctions in criminal penalties under Section 35, and limits on liability of trustees and office‑bearers under Section 39.
In its 11 specific recommendations, Nattai Kappom called for deletion of permanent vesting provisions, confining regulation to unutilised foreign contributions, judicial oversight before vesting, effective appeal rights, exclusion of places of worship and minority institutions, protection of confidential records, and proportionate treatment of minor compliance failures.
“Civil society organisations are an integral part of India’s democratic and developmental fabric,” the memorandum concluded, urging lawmakers to harmonise regulation with constitutional principles, property rights, and institutional autonomy.