MAINS Current Affairs includes Corruption in India: Challenges and the Way Forward & Government Clarification on Designated Authority Under FCRA Amendment Bill, 2026

GOVERNANCE

1. Corruption in India: Challenges and the Way Forward

Context: The NEET-UG 2024 paper leak reignited the national debate on systemic corruption, institutional accountability and governance reforms, highlighting concerns regarding transparency, integrity in public institutions and the effectiveness of India’s anti-corruption framework.

The incident underscored that despite legal and technological reforms, corruption continues to undermine public trust, service delivery and democratic governance.

Corruption in India

• Corruption refers to the abuse of entrusted power or public authority for personal, private or unauthorized gain.
• It involves dishonest or unethical conduct by individuals occupying positions of authority and may occur in government, business, politics or civil society.
• According to the Prevention of Corruption Act, 1988 (amended in 2018) and the Central Vigilance Commission (CVC)

Reasons Behind Corruption & Corrupt Practices

• Institutional Weakness: The deterrent effect is weakened by delays in investigation and prosecution.
  • The limited autonomy of the investigative agencies often raises concerns about selective enforcement.
  • Requirement for prior government approval under Section 17A of the Prevention of Corruption Actto investigate certain decisions taken by public servants.
• Administrative Discretion and Red Tape:Complex procedures, excessive regulations and bureaucratic delays encourage rent-seeking and bribery.
• Weak Transparency Framework:There is apprehension that the Digital Personal Data Protection (DPDP) Act, 2023 could dilute the scope of the RTI Act by extending exemptions relating to personal information.
• Judicial Delays:Corruption cases take years to resolve and thus corruption is a high-profit low-risk activity.
• Political Corruption:Crony capitalism, opaque political funding and electoral financing are eroding public trust.
• Digital Divide:Marginalised citizens often need middlemen to access online services, opening up new opportunities for abuse, even as digital governance has reduced some petty corruption.

Impacts of Corruption

• Governance: Weakens democratic institutions, reduces administrative effectiveness, and erodes public trust in government.
• Economic: Increases project costs, discourages investment and distorts market competition. Promotes crony capitalism and inefficient resource allocation.
• Social: Denies citizens access to basic services like health, education, pensions and food security. Increases inequality by disproportionately affecting vulnerable sections.
• Political: Undermines electoral integrity and accountability; encourages abuse of public office for partisan purposes.
• Rule of Law:Selective justice and delayed administration of justice erode constitutional governance and public trust.

Has Digitalisation Reduced Corruption?

• Direct Benefit Transfer (DBT) + JAM Trinity (Jan Dhan–Aadhaar–Mobile): Launched in 2013, DBT sends subsidies straight into beneficiaries’ bank accounts using Aadhaar authentication, cutting out the network of middlemen who previously skimmed off welfare funds.
• Aadhaar-linked identity verification: Digital payments and biometric identification through Aadhaar have reduced corruption in employment, pension, and fuel-subsidy programmes.
  • Example: digital verification through Aadhaar seeding led to the elimination of about 5.87 crore ineligible ration cards under the Public Distribution System.
• Government e-Marketplace (GeM) for procurement:GeM standardises specifications, enables competitive bidding, and creates an audit trail, reducing the discretionary points in procurement where corruption typically occurs.
• Faceless tax assessment & GST:Faceless e-assessment for income tax, introduced from 2018, means tax officers communicate with taxpayers without face-to-face contact, closing off a classic bribery channel.
• Common Service Centres & DigiLocker:CSCs act as digital service delivery points, serving over 800 million citizens through more than 5.2 lakh centres, while DigiLocker lets citizens store and share documents like Aadhaar and licences digitally, with direct API-based issuance by government institutions.

Challenges Still Remains

• Exclusion errors mistaken for “anti-corruption wins:A J-PAL survey found that 88% of ration cards cancelled by the Jharkhand government for failing Aadhaar-linking actually belonged to genuine, eligible households  not “ghost” beneficiaries.
• Digitalisation doesn’t reach big corruption:Land allocation, environmental clearances, construction permits, and large contracts still involve heavy human discretion, and the digital transformation has reduced petty bribery without touching systemic, high-level corruption.
• Digital divide as a barrier:The digital divide produces new intermediaries with large numbers of rural and marginalised citizens accessing government services through cybercafés or agents.
• New forms of digital rent-seeking: Brokers now charge fees to help people navigate portals, biometric failures, or Aadhaar updates, effectively recreating a middleman economy around the technology itself.

Legislative & Governance Reforms Taken to Control Corruption in India

• Right to Information Act, 2005:One of India’s strongest transparency laws, it has empowered citizens to hold governments accountable.
  • It has helped expose several big scams like Vyapam recruitment scam, Adarsh Housing Society scam, Electoral Bonds disclosures and many irregularities in welfare schemes and public procurement.
  • India receives almost six million applications a year under the Right to Information Act, one of the most popular transparency laws in the world.
• Prevention of Corruption Act, 1988 (amended in 2018):It is to prevent corruption amongst public servants and commercial entities.
  • The Prevention of Corruption (Amendment) Act, 2018has been drafted to bring Indian laws in tune with the United Nations Convention against Corruption (UNCAC) and to tackle both demand and supply side of bribery.
• Lokpal and Lokayuktas Act, 2013:Provides for establishment of statutory watchdogs to enquire into allegations of corruption against public functionaries.
  • It provides for a Lokpal at the Central leveland Lokayuktas in all the states.
• Whistle Blowers Protection Act, 2014:It is meant to take complaints about corruption, abuse of power or criminal offences by public servants, while protecting the identities of those who blow the whistle on them.
• Benami Transactions (Prohibition) Amendment Act, 2016:It is intended to curb black money, bring in transparency and fight financial fraud.
• Prevention of Money Laundering Act, 2002:It aims at preventing money laundering, confiscating property derived from laundered money and combating financial crimes.
• Institutional Measures:Central Vigilance Commission (CVC), Central Bureau of Investigation (CBI), Central Information Commission (CIC), Comptroller and Auditor General (CAG) etc.
• Governance Reforms:Digital India and e-Governance initiatives; Government e-Marketplace (GeM); Direct Benefit Transfer (DBT); Public Financial Management System (PFMS); and Aadhaar enabled service delivery to reduce leakages.

Related Committees & Reforms 

• Santhanam Committee (1964):Laid the foundation for setting up of the Central Vigilance Commission.
• Hota Committee (2004):Recommended reforms in civil service and integrity in public administration.
• 2nd Administrative Reforms Commission (ARC):Improve ethical governance and accountability.
  • Cut discretion and simplify procedures.
  • Safeguard whistle-blowers and strengthen vigilance mechanisms .
• Law Commission:Emphasis on faster trials, independence of institutions and more transparency in anti-corruption laws.

Way Forward: Building on Anti-Corruption Drive

• India should strengthen the Right to Information (RTI) Act while maintaining an appropriate balance between transparency and privacy. Vacancies in Information Commissions should be filled promptly through transparent appointment processes to ensure effective functioning.
• Greater institutional autonomy must be ensured for agencies such as the CBI, Enforcement Directorate (ED), Lokpal and vigilance bodies, enabling impartial investigations free from undue influence.
• An effective grievance redressal mechanism with clearly defined timelines should be established to improve administrative accountability and public trust.
• Dedicated special courts should be created to dispose of corruption cases within one year, thereby strengthening deterrence through speedy justice.
• Transparency in political funding, electoral finance and public procurement should be enhanced to reduce opportunities for high-level corruption.
• The government should also invest in digital literacy programmes and strengthen Common Service Centres (CSCs) to ensure that digital governance is inclusive and does not create new intermediaries.
• Citizen participation should be expanded through social audits, proactive disclosure of information and stronger protection for whistle-blowers, empowering people to hold public authorities accountable.
• Finally, India should strengthen ethical governance by implementing the recommendations of the Second Administrative Reforms Commission (ARC) and promoting integrity, transparency and accountability across all levels of public administration.

Conclusion

• Corruption remains one of the most significant challenges to good governance, inclusive development and democratic accountability in India. While legislative reforms, digital governance initiatives and institutional mechanisms have reduced several forms of petty corruption, systemic corruption continues to affect public institutions, economic efficiency and citizens’ trust.
• Achieving the vision of Viksit Bharat@2047 will require moving beyond technological solutions towards comprehensive institutional reforms that strengthen transparency, ensure speedy justice, empower independent oversight institutions and promote ethical public administration. A governance framework built on integrity, accountability, citizen participation and the rule of law is essential for creating a corruption-resilient India.

GOVERNANCE

2. Government Clarification on Designated Authority Under FCRA Amendment Bill, 2026

Context: The Foreign Contribution (Regulation) Amendment Bill, 2026 has generated debate, particularly among minority and religious institutions, over provisions relating to the management of foreign-funded assets.

• Responding to these concerns, the Government clarified that the proposed Designated Authority would retain the religious character of places of worship in all cases, ensuring that religious institutions would not lose their identity even if their foreign-funded assets come under the authority’s management.
• The Bill seeks to strengthen oversight of foreign contributions while improving transparency, accountability and national security.

Foreign Contribution (Regulation) Act (FCRA), 2010

The Foreign Contribution (Regulation) Act (FCRA), 2010 regulates the acceptance, utilisation and management of foreign contributions by individuals, associations and organisations in India.

Its primary objective is to ensure that foreign funds are not used for activities detrimental to the sovereignty, integrity, security and public interest of India.

Evolution of FCRA

• First enacted in 1976.
• Replaced by the FCRA, 2010.
• Subsequently amended in:
  • 2016
  • 2018
  • 2020
  • 2026 (proposed amendment)

The Act is administered by the Ministry of Home Affairs (MHA).

Provision of Designated Authority for Asset Management

• The Bill proposes the creation of a Designated Authorityas the core institutional mechanism for managing foreign-funded assets.
• The authority will take control of foreign contributions and assetswhen an organisation’s registration is cancelled, surrendered, expired, or not renewed.
• This authority will have the powers of a civil courtand can order the transfer or sale of assets owned by NGOs to either the government or any other body.

Constitutional Provisions

• Freedom of religion: Any state action affecting religious institutions must satisfy tests of legality, necessity, and proportionality.
  • Article 25:Freedom of conscience and free profession, practice, and propagation of religion.
  • Article 26:Rights of religious denominations to manage their own affairs.
• Freedom of association:Article 19(1)(c) protects the right to form associations. The Supreme Court in Noel Harper v. Union of India (2022) case has held that receiving foreign contribution is not an absolute fundamental right, but regulation must not be arbitrary.

Other Key Provisions of the 2026 Amendment Bill

• Government Power Over Assets:If registration is not restored, the government can transfer assets to a government department.
  • It can also sell those assets, with proceeds going to the Consolidated Fund of India.
• Automatic Cessation of Registration:A new Section 14B is introduced, providing for “deemed cessation” of FCRA registration upon expiry or refusal of renewal.
• Registration automatically stops in three situations:
  • Organisation fails to apply for renewal.
  • Renewal application is rejected.
  • Validity period expires without renewal.
• Time-Bound Utilisation of Funds: The amendment introduces mandatory timelines for the receipt and utilisation of foreign funds to improve financial discipline and transparency.
• Restrictions During Suspension: A suspended organisation cannot sell, transfer, or mortgage its foreign-funded assets.
  • Prior government approval is mandatory for any such action.
• Centralised Investigation Control: Section 43 of the parent Act is amended, requiring any law enforcement agency or state government to obtain prior clearance from the Centre before beginning an inquiry into FCRA allegations.
• Rationalisation of Penalties:The amendment reduces the severity of penalties for violations under the Act. The maximum punishment is reduced from five years of imprisonment to one year, or fine, or both.
• Individual Accountability: The definition of “Key Functionary” now includes directors, partners, trustees, karta of Hindu Undivided Family (HUF), office-bearers of societies/trusts/trade unions, and any person with control over management.
  • They are personally liable unless they prove lack of knowledge or due diligence.
• Permanent Vesting of Assets: If an organisation shuts down, becomes inactive, or ceases to exist, its foreign-funded assets will permanently vest with the government through the Designated Authority.

Why is Regulating Foreign Contributions Necessary?

• It protects national securityand sovereignty from outside interference.
• It prevents money laundering and diversion of money to illegal activities.
• It ensures that the funds are utilised for developmental and charity purposes only.
• It offers transparency and accountability to the working of the NGO.
• Prohibits foreign funding of electoral candidates, journalists, judges, government personnel and political organisations– all of which are barred under FCRA.

Concerns over regulating foreign contributions

• Administrative Delays:The registration and renewal process is time-consuming which affects NGOs’ ability to access funds and carry out activities.
• Political Interference: The government’s discretionary powers to cancel registrations or freeze accounts of NGOs can be
• Hinders development:Stringent Compliance Requirements of foreign contributions affects the social and economic development in India.
• Lack of Transparency: Some NGOs have been criticized for lacking transparency in their utilization of foreign funds received under the FCRA.

Way Forward

• The implementation of the Foreign Contribution (Regulation) Amendment Bill, 2026 should strike a careful balance between national security, financial accountability and the autonomy of civil society organisations. While strengthening oversight over foreign contributions is essential, regulatory mechanisms should remain transparent, predictable and free from excessive administrative discretion.
• The proposed Designated Authority should function with clearly defined powers, transparent procedures and adequate safeguards to ensure that the management of foreign-funded assets does not adversely affect legitimate charitable, educational or religious activities. The Government’s assurance regarding the preservation of the religious character of places of worship should be supported by explicit procedural safeguards.
• The registration and renewal process under the FCRA should be streamlined through digital platforms and time-bound approvals to minimise delays and reduce uncertainty for compliant organisations. Greater transparency can also be achieved by publishing guidelines, decisions and reasons relating to registration, suspension and asset management.
• Strengthening institutional oversight, encouraging voluntary compliance, ensuring independent grievance redressal and maintaining regular dialogue with civil society organisations will help improve trust while safeguarding national interests. Such a balanced approach can ensure that foreign contributions continue to support developmental activities without compromising India’s sovereignty, security or constitutional values.

Conclusion

The Foreign Contribution (Regulation) Amendment Bill, 2026 seeks to strengthen the regulatory framework governing foreign contributions by introducing the Designated Authority, enhancing accountability and ensuring better management of foreign-funded assets. The Government’s clarification that the religious character of places of worship will be preserved seeks to address concerns raised by minority institutions and reaffirm constitutional protections.

While effective regulation of foreign contributions is necessary to safeguard national security, prevent misuse of funds and ensure transparency, the success of the amended framework will depend on its fair, transparent and proportionate implementation. A balanced approach that protects both national interests and the legitimate functioning of civil society organisations is essential for strengthening democratic governance and public trust.

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