Parliament today enacted a new law to enforce stricter regulations for foreign contributions in form of gifts, funds and other forms to individuals and social organisations in the wake of changed internal security environment and large fund flow.

Parliament's approval of the Foreign Contribution (Regulation) Bill, 2010 came against the backdrop of only 18,000 of the over 40,000 organisations which received foreign contribution in the country reporting the inflow of funds and submitting their accounts.

Foreign funds have also come under the scanner in the recent years in the wake of suspicions that some of it may have been used for anti-India terror activities.

The Bill was greenlighted after Lok Sabha approved the measure. The Rajya Sabha has already passed it.

Replying to a debate on the Bill in the Lok Sabha, Minister of State for Home Ajay Maken said keeping in mind national security and the changed internal security scenario, the legislation would prevent "powers" which want to use foreign funds to divide the country on "religious basis."

During the debate on the bill, the Opposition dubbed the legislation as half baked.

"It is a half baked law...but we support it as our party favours stringent laws to defend national security," Nishikant Dubey (BJP) said initiating the debate on the bill.

Maken said the bill had sufficient provisions to ensure that NGOs actually involved in developmental activities do not suffer.

Noting that there were over 40,000 organisations receiving foreign contribution in the country, he said only 18,000 of them report the inflow of funds and submit their accounts.

"The rest are dormant...the bill will ensure that every five years the organisations renew their registration so that the dormant ones can be weeded out," he said.

According to the statement of objects and reasons of the bill, significant developments have taken place since the Foreign Contribution (Regulation) Act, 1976 was amended in 1984.

"Significant developments have taken place since 1984 such as change in internal security scenario, an increased influence of voluntary organisations...spread of use of communication and IT...," the statement said.

Maken said if any organisations receives funds over Rs 10 lakh, the bank will immediately inform the government to enable the agencies to "track" the funds.

He said organisations with fictitious or benami accounts, have indulged in conversions directly or indirectly, created communal tension, supported sedition or have diverted funds earlier would be barred from receiving foreign contributions.

The bill seeks to replace the present Act by a new legislation to regulate the acceptance, utilisation and accounting of foreign contributions and acceptance of foreign hospitality by a person or an organisation.