Prelims level : Polity and Governance - Judiciary Mains level : GS-II Structure, Organization and Functioning of the Executive and the Judiciary.
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Why in News?

  • The Supreme Court recently held that the central government cannot brand an organisation political and deprive it of its right to receive foreign funds for using legitimate forms of dissent to aid a Public Cause.


  • This judgement comes in the background of a petition filed by the Indian Social Action Forum (INSAF) challenging certain provisions of the Foreign Contribution Regulation Act (FCRA), 2010 and the Foreign Contribution (Regulation) Rules of 2011.

Issues with the FCRA Act:

  • The FCRA 2010 prohibited acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest.
  • 1.Unbridled Powers to the Centre:
    • But both the Act and the rules confer the Centre with ‘unguided and uncanalised power’ to brand organisations political and shut down their access to foreign funds.
    • Section 5(1) of the FCRA was challenged for being vague as it allowed the Centre to decide freely whether a seemingly non-political organisation was actually political in nature. The Court said that the provision was expansive and not vague.
  • 2.No Proper Grievance Addressal:
    • Section 5(4) of the FCRA was also questioned as it did not exactly identify the authority before which an organisation could represent its grievance. This contention was dismissed by the apex court.
  • 3.Activities which are classified as “Political” in Nature
    • Various clauses of Rule 3 of the 2011 Rules were also challenged. This provision identified the various types of ‘political’ activities for which/organisations whose foreign funding could be stopped by the Government.

Highlights of the Judgement:

  • SC observed that an organisation, which supports the cause of a group of citizens agitating for their rights without a political goal or objective, cannot be penalised by being declared as an organisation of a political nature.
  • However, foreign funding could be stopped if an organisation took recourse to these forms of protest to score a political goal.
  • Organisations with political objectives in their memorandum of association or bye-laws cannot be permitted access to foreign funds because of their clear political nature.

Justifications behind the Move:

  • A prohibition from receiving direct or indirect foreign aid ensures that the values of a sovereign democratic republic are protected.
  • It is to make sure that the administration is not influenced by foreign-funded political organisations.
  • Foreign funding can continue for organisations of farmers, workers, students, youth based on caste, community, religion, language, etc as long as they work for the social and political welfare of society and not to further political interests.
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