Why Modi government’s FCRA Bill is facing pushback
The Foreign Contribution (Regulation) Amendment Bill, 2026 was referred to a Joint Parliamentary Committee (JPC) amid disruption in Parliament, with sections of the Opposition demanding its withdrawal
Objections centred on the Bill's provision allowing a newly created "designated authority" to permanently vest assets in the government where those assets were created "partly from foreign contribution and partly from other sources," even if the foreign-funded share was small
The designated authority would also have the power to transfer such vested assets to any government ministry, department or agency, or to dispose of them by sale, with proceeds credited to the Consolidated Fund of India
Civil society groups, including minority religious institutions running hospitals, elder-care homes and educational institutions funded partly by foreign contributions, flagged concerns about the Bill's retrospective application to licences granted before the amendment but not yet renewed
Retrospective Application of Law — What the Constitution Actually Bars
A recurring concern about the Bill is its retrospective effect on FCRA registrations granted years ago but pending renewal. Indian constitutional law draws a sharp line here: retrospective criminal punishment is barred, but retrospective civil and regulatory legislation is generally permitted, subject only to a reasonableness test.
Key Details
- Article 20(1) of the Constitution prohibits conviction or enhanced punishment under a criminal law enacted after the act was committed (the "ex post facto law" bar) — but this protection applies only to criminal offences, not to civil, regulatory or tax legislation
- Courts have consistently upheld retrospective civil laws (including retrospective taxation) as constitutional, provided the retrospective effect is not so harsh, arbitrary or unreasonable as to violate Article 14 (equality) or Article 19 (freedom of association/trade, where applicable)
- Because FCRA registration and cancellation are regulatory (not criminal) processes, retrospective application of new grounds for cancellation or asset vesting would not attract the Article 20(1) bar directly, but could still be challenged as manifestly arbitrary under Article 14
- The 2026 Bill's imprisonment provisions (a separate, criminal-law track) would not apply retrospectively to conduct predating the amendment, since that would squarely engage Article 20(1); it is the civil/regulatory provisions — asset vesting, deemed cessation — where the retrospectivity debate is live
The legal objection is not that retrospective application is unconstitutional per se, but that applying new asset-vesting powers to organisations whose registration predates the amendment could be challenged as unreasonable or arbitrary, a different and higher bar than the automatic bar on retrospective criminal punishment.
Article 26 — Religious Denominations' Right to Own and Administer Property
A significant share of the institutions raising concerns are minority religious bodies running hospitals, elder-care institutions and schools partly funded through foreign contributions. Their objections engage Article 26, which protects a religious denomination's right to own, acquire and administer property, distinct from the individual right to practise religion under Article 25.
Key Details
- Article 25(1) protects an individual's freedom of conscience and right to profess, practise and propagate religion, subject to public order, morality, health and other fundamental rights
- Article 26 separately protects every religious denomination's right to: establish and maintain institutions for religious and charitable purposes; manage its own affairs in matters of religion; and own, acquire and administer property "in accordance with law"
- The property-administration right under Article 26(d) is explicitly subject to law — meaning Parliament can regulate how such property is administered, but any regulation must not be so intrusive as to extinguish the denomination's core right to manage its own institutions
- Courts have distinguished "matters of religion" (protected absolutely from state interference under Article 26(b)) from purely secular administrative or financial matters connected to religious institutions (which the state can regulate, including through FCRA-type financial oversight)
Government representatives clarified that the designated authority will "retain the religious character of places of worship in all cases" — an acknowledgment of the Article 26 boundary the Bill must respect, even as it expands financial oversight over the secular assets of religiously affiliated charitable institutions.
The Designated Authority's Powers and Natural Justice Safeguards
The Bill's most contested feature is the "designated authority," a new statutory body under a proposed Chapter IIIA of the FCRA, empowered to take control of an organisation's foreign-funded assets once its registration is cancelled, surrendered, or deemed to have ceased, with powers described as equivalent to those of a civil court.
Key Details
- The audi alteram partem principle ("hear the other side") is a foundational rule of natural justice in Indian administrative law — no person's civil rights or property can be prejudicially affected by a state authority without a reasonable opportunity to be heard
- In A.K. Kraipak v. Union of India (1969), the Supreme Court held that even bodies performing administrative (not strictly judicial) functions must observe natural justice when their decisions affect rights, collapsing the older rigid administrative-versus-quasi-judicial distinction
- Maneka Gandhi v. Union of India (1978) elevated the right to a fair hearing to constitutional status, linking it to Article 14 (non-arbitrariness) and Article 21 (personal liberty, read to include livelihood and property-linked rights)
- A new Section 14B in the Bill provides for "deemed cessation" of FCRA registration — automatic lapse where renewal is not applied for, is refused, or is not granted before expiry — which civil society groups argue could trigger asset vesting without an adequate individual hearing for each affected organisation
Whether the designated authority's exercise of "civil court" powers includes adequate natural-justice safeguards — individual notice and a hearing before assets vest — is likely to be a central question before the Joint Parliamentary Committee and, eventually, in any judicial challenge to the enacted law.
- FCRA Amendment Bill, 2026 referred to a 31-member Joint Parliamentary Committee (21 Lok Sabha + 10 Rajya Sabha); report due by the last day of the first week of Winter Session 2026
- New Section 14B introduces "deemed cessation" of FCRA registration on non-renewal, refusal of renewal, or expiry
- New Chapter IIIA creates the "designated authority" to take control of and vest foreign-funded assets on cancellation, surrender or cessation of registration
- Article 20(1): bars retrospective conviction/enhanced punishment for criminal offences only; does not bar retrospective civil or regulatory law
- Article 25 protects individual religious practice; Article 26 separately protects a religious denomination's right to own and administer property "in accordance with law"
- A.K. Kraipak v. Union of India (1969): extended natural justice to administrative functions affecting rights
- Maneka Gandhi v. Union of India (1978): gave the right to a fair hearing constitutional status under Articles 14 and 21