Centre Introduces FCRA Amendment Bill 2026: Proposes Vesting Of Defunct NGO Assets In 'Designated Authority', Mandates Prior Nod For Probe

"The absence of a comprehensive framework for supervision, management and disposal of such assets has led to administrative uncertainty and scope for misuse." Central Government, introduced the Foreign Contribution (Regulation) Amendment Bill, 2026, in the Lok Sabha, proposing sweeping statutory changes to the management of foreign contributions and assets of non-governmental organisations (NGOs). Introduced by Union Home Minister Amit Shah, the Bill seeks to establish a statutory framework to vest the assets of NGOs whose certificates are cancelled, surrendered, or expired, into a government-appointed 'Designated Authority'. Furthermore, the amendment strictly bars investigative agencies from initiating probes under the Act without the Centre's prior approval.

The Foreign Contribution (Regulation) Act, 2010 regulates the acceptance and utilisation of foreign contributions to safeguard national interest, public order, and national security. According to the Statement of Objects and Reasons appended to the Bill, there are presently around 16,000 registered associations in India receiving approximately ₹22,000 crore annually in foreign contributions. Over time, the government identified operational and legal gaps, particularly concerning the fate of assets created from foreign funds when an organisation's registration is cancelled or surrendered, necessitating a comprehensive legislative overhaul.

The primary question addressed by the proposed legislation is how to supervise, manage, and dispose of assets created out of foreign funds when an NGO ceases to operate or loses its registration. The legislation was also called upon to resolve ambiguities regarding the treatment of assets during suspension, to rationalise penalties for corporate entities, and to check the multiplicity of investigations by requiring prior government sanction.

PROVISIONS OF THE AMENDMENT BILL

Vesting Of Assets In Designated Authority

The most significant change proposed is the omission of Section 15 of the principal Act and the insertion of a new Chapter IIIA. This creates a statutory mechanism wherein the foreign contributions and assets of any person whose certificate is cancelled, surrendered, or ceased shall provisionally vest in a 'Designated Authority'. The Bill specifies that the authority may manage these assets directly or through an Administrator to safeguard and preserve them in the public interest.

Permanent Vesting And Disposal Of Property

The proposed Section 16A(5) stipulates that if an organisation fails to obtain a fresh certificate or get its registration renewed within a prescribed period, its assets "shall thereupon stand permanently vested in the Designated authority." Once permanently vested, the authority is empowered to transfer these assets to any Ministry or State Government, or dispose of them through sale, crediting the proceeds to the Consolidated Fund of India.

Protection Of Religious Assets

Addressing concerns over properties with religious significance, the Bill carves out a specific exception. The proposed Section 16A(7) states that where any permanently vested asset is a place of worship, the authority shall entrust its management to an eligible person to "ensure that the religious character of such place of worship is maintained."

Cessation Of Registration Certificate

The Bill seeks to insert a new Section 14B, which introduces the concept of 'cessation' of a certificate. Under this provision, a certificate shall automatically be deemed to have ceased if the application for renewal is not made, is refused by the Central Government, or is simply not renewed before its expiry. The legislation clarifies that no person whose certificate has ceased to exist shall receive or utilise foreign contributions.

Bar On Dealing With Assets During Suspension

To tighten control over funds while regulatory action is pending, the Bill amends Section 13 of the principal Act. It introduces a restriction stating that an organisation whose certificate is suspended shall "not alienate, encumber or otherwise deal with any asset created out of the foreign contribution, except with the prior approval of the Central Government."

Prior Approval Mandated For Investigations

In a move that impacts the enforcement of the Act, the Bill amends Section 43 to shield organisations and functionaries from arbitrary probes. The newly inserted sub-section (2) emphatically states that "No investigation shall be initiated for any offence punishable under this Act except with the prior approval of the Central Government."

Updating References To New Criminal Laws

Reflecting India's transition to a new criminal justice system, the Bill systematically replaces outdated colonial-era statutes throughout the FCRA. References to the Code of Criminal Procedure, 1973 are substituted with the Bharatiya Nagarik Suraksha Sanhita, 2023. Similarly, references to the Indian Penal Code and the Indian Evidence Act are replaced with the Bharatiya Nyaya Sanhita, 2023, and the Bharatiya Sakshya Adhiniyam, 2023, respectively.

The Foreign Contribution (Regulation) Amendment Bill, 2026, marks a decisive shift towards stricter governmental supervision over foreign-funded NGOs in India. By mandating prior approval for investigations and creating a robust mechanism to permanently confiscate and sell assets of non-compliant entities, the legislation aims to enforce absolute accountability and eliminate administrative ambiguity in the handling of foreign contributions.

Date of Introduction: 19 March 2026

Bill Title: The Foreign Contribution (Regulation) Amendment Bill, 2026 | Bill No. 97 of 2026