The bill aims to curb misuse of foreign funds and improve transparency and accountability.

Key provisions 

• Creation of a "Designated Authority": to to take over, manage, or dispose of assets created from foreign contributions if NGOs’ registration is cancelled, surrendered, or not renewed.
  • If registration is not restored, Authority may transfer/sell them, with proceeds deposited in the Consolidated Fund of India; decisions challengeable only in court.
• Rationalization of Penalties: Maximum imprisonment cut from 5 years to 1 year
• Prior approval required: No investigation can begin without prior approval of Central Government.
• New Definitions of “Key Functionary”: Widened to include directors, partners, trustees, and office bearers responsible for and controlling the organisation’s affairs.
• Others: Sets timelines for fund use (under prior permission category); regulate handling of assets during suspension, FCRA registration lapses automatically if not renewed in time.

Issues raised against the bill 

• Excessive delegation: Key aspects (asset handling, timelines, appeals) left to government rules instead of the law.
• Democratic concerns: Personal Liability and Reverse Burden of Proof may shrink civil society space, creating uncertainty and fear for NGOs.
• Article 300A: Broad executive control over NGO assets by Designated Authority with inadequate safeguards potentially risks violating right to property.
• Article 14: Prior approval may enable selective enforcement, undermining equality before law.