Govt bid to allow foreign funding of parties

At a time when the Narendra Modi government has clamped down on non-governmental organisations (NGOs) over foreign funding, it has proposed an amendment with retrospective effect that will allow political parties to accept donations from overseas companies whose ownership of Indian entities is within the foreign investment limits prescribed for the sector.

Until now, the Foreign Contribution (Regulation) Act, 2010, or FCRA, banned political parties from receiving funds from any foreign source. The original law defines "foreign source" to include any company with foreign investment of above 50 per cent.

Finance Minister Arun Jaitley proposed the amendment to this, which had until now gone unnoticed, in the Finance Bill as part of the Union Budget of 2016-17 that he presented on February 29. The amendment is retrospective and will come into effect from 2010, when the FCRA was introduced.

The Delhi High Court in 2014 had found both the Bharatiya Janata Party (BJP) and the Congress guilty of having accepted foreign donations from the London-based Vedanta Group. It had asked the government and the Election Commission to take action, and also sought the home ministry to take action within six months.

The Centre had appealed against the order in the Supreme Court. Jagdeep Chhokar of the Association for Democratic Reforms (ADR), the petitioners in the case, termed the government's move as a "blatant attempt" to save the BJP and the Congress. "This is a blatant act. They were declared guilty without ifs and buts by the Delhi High Court. The government was asked to take action. No action was taken. The government went in appeal in the apex court. While all of that is on, they have now done this," he said.

In a series of tweets, lawyer Prashant Bhushan, the advocate for ADR, wrote: "As govt throttles Greenpeace/Teesta exposing Modi, it retro amends FCRA to absolve Cong/BJP from crs of Foreign Funds!" and "Govt amends FCRA with retro effect to absolve Cong/BJP & allow Pol parties unlimited Foreign funds from Companies. Acche din for corps & Parties!" (sic)

Bhushan was alerted of the development when The Wire called him for comments on a report it published revealing the proposal, according to the website.

The Aam Aadmi Party (AAP) demanded the withdrawal of the amendment. It appealed to non-Congress and non-BJP parties to ensure the defeat of the amendment in Parliament and said this amendment would encourage flow of black money into the Indian political system and allow other foreign companies to fund political parties.

FOREIGN HAND

• Until now, the Foreign Contribution (Regulation) Act, 2010 banned political parties from receiving funds from any foreign source
   
• FM Jaitley proposed the amendment to this, which had until now gone unnoticed, in the Finance Bill as part of the Budget 2016-17
   
• The Delhi High Court in 2014 had found both the BJP and the Congress guilty of having accepted foreign donations