Govt likely to relax foreign funding rules for NGOs amid Covid crisis

Govt likely to relax foreign funding rules for NGOs amid Covid crisis

The unprecedented second wave of Covid-19 has put India’s healthcare system to test as the country continues to report over 3 lakh cases and thousands of deaths every day. To ease the burden on hospitals, several non-profit and philanthropic groups are extending support to patients.

In a bid to strengthen such non-profit organisations (NGOs), the government is likely to temporarily waive provisions of the Foreign Currency Regulation Act (FCRA), reported The Economic Times.

This will help the country's NGOs utilise foreign funding and donations to help Covid-19 patients during the nationwide public health emergency. Quoting an official, the report said NGOs had been requesting the home ministry for such a waiver for the last six months.

It may be noted that the home ministry is responsible for the grant and renewal of FCRA licences. The FCRA rules are likely to be relaxed for NGOs after May 31 when NGOs apply for licence renewal, added the report.

The FCRA rule was amended by the Centre, and it had come into effect from September 2020. It empowered the Centre to hold a “summary inquiry” and order a “violator” not to use foreign funding. The report noted that this rule was earlier applicable to an association that was found guilty of violating the FCRA act.


Under the amended rules, NGOs were asked to register under FCRA to open an account at a specified branch of the State Bank of India (SBI) by March 31, 2021. However, the limit of administrative expenses was reduced from 50 per cent to 20 per cent.

Read | Why NGOs fear the new FCRA regulations

The rule also mandates providing the Aadhaar number of all office-bearers, directors and other key functionaries. In a scenario where a person on the NGO board is not an Indian, a copy of their passport or overseas citizen of India (OCI) card has to be provided.


The relaxation of FCRA rules will help NGOs and other philanthropic organisations utilise foreign funding and donations for ramping up the supply of critical healthcare equipment to help Covid-19 patients who have failed to get treatment at hospitals.

The additional funds will help smaller NGOs and organisations provide better treatment and healthcare facilities to Covid-19 patients in rural areas, where the health infrastructure is weaker than urban areas.