Foreign Contribution Regulation Act (FCRA) regulates the foreign contribution (money donation) and foreign hospitality (e.g. free airplane tickets and hotel lodging during videsh-yaatra monies) given to various NGOs, institutes, judges, journalists, public servants etc.
We need FCRA to keep a check that foreigners are not affecting/ influencing India’s electoral politics, public servants, judges, journalists, NGOs etc. for wrong purposes. If someone violates the FCRA provisions, the culprit can be sent to jail for up to 5 years.
All Organizations working for definite cultural, social, economic, educational or religious programs are entitled to receive donations here under. But first, they’ve to get permission from the Ministry of Home Affairs and also, they are have to maintain separate account book listing the donation received from foreigners and get it audited by a Chartered Accountant and submit it to Home Ministry every year.