Difficulties in FCRA approval

Dear Dialogue Members,
We are the Miracle Foundation India that supports children’s homes in India.  We have previously filed and received two prior permissions.  However, it is over a year and half  since our 3rd prior permission has not been approved.  We are registered as a Section 25 NGO. We have also recently passed our 3 year mark and as such are eligible to receive FCRA. 
We have received a letter stating that our donor-done names are same (similar words as US organization).  Secondly we have been told (not in writing) that in order to receive approval it would be necessary to change the ownership percentage to India majority owned.  
Our question is whether any other NGO has been successful in receiving approval by changing to a majority ownership by the India NGO.  
We also are concerned because we do not want to change the name of the organization as it will dilute our brand.  
What would be the recommendation of other members on the path we should take in order  to move our FCRA application forward? We are concerned if we do not have action on this that our support for the destitute children will be at risk.  
Thank you & regards
Nivedita DasGupta
India Country Head
Miracle Foundation India
A-149 Shivalik
New Delhi 110017
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8 Responses to Difficulties in FCRA approval

  1. Subhash Mittal says:

    Dear SRRF Dialogue Members,

    I am happy to share that FCRA Dept has responded positively to the anguish shared by Mrs Dasgupta on this portal, regarding delay / non-decision on her organisation, Miracle Foundation India’s Prior permission application.

    The Dept has moved swiftly and has come out with a policy decision regarding all such organisations which are operating either under same name as their foreign counterpart or could even have same ownership. As per the guidelie dt 27th August Indian part of such entity has to provide following information.

    1. Details of key functionaries of the foreign counterpart and sources of its funds.
    2. Details of India Projects funded by the donor during last 5 years.
    3. Name of the law under which foreign body is incorporated / registered in the host country and copy of its Annual report.
    4. In case Indian body and foreign body have common members, this is not a bar for giving FCRA permission, provided satisfying following conditions:
    a) Chief Functionary of the Indian body should not be part of the donor organisation. (not clear what does part means, a member or an employee)
    b) at least 51% of the office-bearers / members of the Governing Body of the Indian organisation should not be members / employees of the foreign donor organisation (thus a member Indian body being a member of foreign body is not a bar, however these persons being members / employees of foreign body should not have controlling stake in the Indian body).
    c) In case of foreign donor organisation is a single person body (like a One Person company as introduced in India) or an individual, s/he should not be the chief functionary of Indian body (seems duplication of (a) above).
    d) In case of a single foreign donor, at least 51% office bearers / members of the Indian governing body should not be the family members and close relatives of the donor.

    I wish Mr Dasgupta a speedy decision in her case and also thank all the Dialogue members for their active participation on this platform, which has made FCRA Dept take notice of discussion on this portal. I do hopee you would continue to particiapte in a similar constructive spirit to help both the Dept fulfil its objectives and NPOs comply with legislative requirements.

    warm rgds

    subhash mittal

  2. Avineesh Matta says:

    Please undergo the relevant Policy and Regulations. Investment in section 25 (now section 8) are not permitted under FDI Policy and are beyond the scope of automatic route. Correct me if I am wrong.

  3. Mr Mittal
    Thank you for your comments.

    Through this medium I do want to ask the larger audience and the FCRA, will they (FCRA) cancel registration (of FCRA) of all those international organizations operating in India who have their HQ or counterparts by the same name overseas?

    When no such clause (on org with same name not to be given FCRA) does not exist in the current FCRA act, why are we being denied the prior permission? Our entire work is coming to a standstill!

    Nivedita DasGupta

    • Subhash Mittal says:

      Mrs Dasgupta,

      I can well understand the frustration that you must be facing. However I suggest to take the offer of the FCRA Dept. see post by CL Sharma, an official of the FCRA Dept. Please send an e-mail to the concerned section officer. Hope they can explain the reasons for the delay or provide you with much-awaited prior permission. However if nothing works, I suppose you can always go under RTI and ask them on what provisions of the Act the application has been held up.

      Wishing you all the best.

  4. C L Sharma says:

    Dear applicant,

    Please contact Section Officer(FCRA-I) on tel No.011-23438044 (email ID : sofcra1@nic.in, ds-fcra@nic.in ) for solution.

    C L Sharma

  5. R. Jayachandran says:

    Dear Ms.Nivedita

    By maintaining the same name, your organization becomes a branch of the international organisation. The registration process for the branch office is different from the regular NGO registration under FCRA. The permission is needed from
    RBI to open a branch. Kindly refer the rules relating to the registration of a branch NGO.


    • Subhash Mittal says:

      Thank you Mr Jayachandran for your comments.

      I have a different view.

      As per companies Act any foreign company can start a 100% subsidiary, or appropriate % of FDI investment can be made as per RBI permitted rules. At present there are no restrictions in case of social sector. Regarding Branch Office, this provision has been there for long and one needs to apply through RBI.

      Thus legal entity is not the issue here, but FCRA permission is the issue. There are several organisations which are Indian legal entities, as a society or S.25 companies, but which function under the same name as their parent counterpart outside India. All of these have necessary FCRA permission. Immediate well known such names that come to my mind are Oxfam, Save the Children, Plan India, etc. I am sure there are several others.

      Even in case of Greenpeace India, it had FCRA permission. Objections regarding their activities by Internal Bureau were raised only recently. Considering the objectives of Miracle Foundation India (organisation mentioned above) which basically supports orphanges and child care institutions in India, I am at a loss why FCRA Dept has raised objections. This is a new development, for which the FCRA Dept has not really elaborated at all. Perhaps at this juncture even the Dept is not clear of its stand and hence the ambiguity. Considering this blog is also being read by the FCRA Dept (see comment of Mr CL Sharma above), I do hope they will take quicker decisions, as expected of them under S. 12(3) of the FCRA Act. It may be further mentioned that grounds for rejection of the Prior permission / Registration are mentioned under S. 12 (4a), however the argument by the FCRA as mentioned above in the blog is not a ground for rejection.

      I sincerely hope, the Dept takes a quicker decision in the case and stops harassing organisations without giving any reasons.

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