Indian Democracy in 100 Notes · ✊ Theme 7: Civil society & protest
NGOs, FCRA, and the space for civil society
Non-governmental organisations (NGOs) and other civil society groups fill roles that governments and markets do not always cover: running schools and health services, providing legal aid, documenting rights violations, doing research, and organising communities. They are part of civil society, a space between the individual, the market and the state where people associate voluntarily to pursue shared goals. A healthy democracy usually has a diverse civil society, including groups that criticise government policy as well as groups that partner with government programmes.
Foreign funding is where regulation becomes most contested in India. The Foreign Contribution (Regulation) Act (FCRA) governs acceptance and use of foreign contributions. The first FCRA was enacted in 1976, replaced by the FCRA, 2010, and amended in 2016, 2018, 2020 and, through rules and a bill, in 2026. The 2020 amendment, among other changes, prohibited sub-granting of foreign funds, required foreign contributions to be routed through a designated bank account, and reduced the ceiling on administrative expenses from 50% to 20%. The government has said FCRA does not ban foreign donations, but regulates them to protect sovereignty, security and public order, and to ensure transparency about money that could affect national interest. The Press Information Bureau has also said FCRA-registered associations are under 1% of all NGOs in India, arguing that the law targets a specific foreign-funded channel, not civil society as a whole.
Critics, including the International Commission of Jurists, argue that terms such as "national interest" are broad, and that compliance burdens, cancellations and non-renewals can shrink space for independent work, especially for small and grassroots organisations. New FCRA Amendment Rules adopted on 22 June 2026, according to reports on the rules, require existing organisations to align within one year and introduce a minimum spending threshold of Rs 10 lakh of foreign contribution over two years for renewal, a provision critics say penalises small groups. The government has presented the 2026 changes as closing gaps and ensuring that foreign funds are used for declared purposes, not for proselytisation or other prohibited activity. Readers should treat the 2026 bill and rules as evolving: parliamentary approval, implementation and court challenges may change the picture.
The balanced question is not whether foreign funding should be unregulated or banned, but what level of transparency protects legitimate public interests without making lawful civic work impossible.
Key takeaways
- Civil society includes service, advocacy, research and community organisations, not only large NGOs.
- FCRA regulates foreign contributions; the 2020 amendment tightened sub-granting, banking and administrative spending.
- The 2026 rules are presented by government as transparency reform and criticised by rights groups as restricting civic space.
Why it matters for civil studies: FCRA shows how a state can use financial regulation — not only protest bans — to shape which voices can operate at scale.
Discussion question: What would a fair FCRA look like if it had to satisfy both transparency about foreign money and protection for small, independent organisations?
Fact-checked copy, 1 November 2026. Disputed claims are attributed in the text; moving topics should be re-checked at the time of reading.