The Union government has suddenly backtracked on its plan to introduce a highly contentious new piece of legislation in the Lok Sabha, which is aimed at tightening the rules governing foreign funding. The Foreign Contribution Regulation Amendment Bill, 2026, has been surprisingly left out of the Lok Sabha’s agenda on Wednesday, following sustained pressure from the Opposition parties who are calling it an overreach.
At the core of this controversy, however, is a proposal to appoint a "designated authority" with powers to take over the assets and money of any NGO or trust whose registration has lapsed, been cancelled, or even voluntarily surrendered. As per terms, such foreign-funded assets could ultimately be sold off or absorbed into the Consolidated Fund of India, effectively bringing them under permanent government control.
The Bill also aims to introduce a number of other stringent measures, including a provision which would cause the FCRA registrations to lapse automatically in the event of non-renewal or rejection of the renewal of the registration. Organisations facing investigations would also be denied the right to sell or mortgage properties and assets developed out of foreign funds without the approval of the Centre.
Critics have pointed out a curious contradiction in the proposed law: while it expands legal accountability to include individual directors and trustees, it actually seeks to reduce the maximum prison sentence for violations from five years to just one. Despite this apparent softening of penalties, the Bill’s broader focus on centralising control over investigations — requiring government clearance before any probe can even begin — has fueled fears of political targeting.
For now, the legislation remains in limbo. Government sources suggest the decision to defer the Bill was a tactical move to avoid a parliamentary stalemate, though it remains to be seen whether the draft will be diluted or simply reintroduced once the current political storm blows over.
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