Political parties get relief from scrutiny of foreign funding
The Lok Sabha has recently passed a bill that will exempt political parties from scrutiny of funds they have received from abroad since 1976. On Wednesday, the House passed 21 amendments to the Finance Bill 2018 amid chaotic protests by the opposition parties. One of them was an amendment to the Foreign Contribution (Regulation) Act (FCRA) 2010 that bans overseas corporations from funding parties.
BJP government has amended FCRA to do away with scrutiny
The Representation of People's Act, which lays down the rules for elections, bars political parties from accepting foreign funds. The BJP government had, through Finance Bill 2016, amended the FCRA to make it easier for parties to accept foreign funds. Now, it has amended it further to do away with the scope for scrutiny of a political party's funding since 1976.
Amendment will help BJP and Congress
"In the Finance Act, 2016, in section 236, in the opening paragraph, for the words, figures and letters 'the 26th September, 2010', the words, figures and letters 'the 5th August, 1976' shall be substituted," the House said listing amendments to Finance Bill 2018. The amendment will help BJP and Congress escape the fallout of a 2014 Delhi High Court judgment that held both guilty.
FCRA passed in 1976 was later replaced with FCRA 2010
The FCRA passed in 1976, defined a company, Indian or foreign, registered abroad or with subsidiaries abroad as a 'foreign firm.' It was later repealed and replaced with the FCRA 2010. The BJP government through the Finance Act, 2016, said that a firm with less than 50 percent of share capital held by a foreign entity would no longer be a foreign source anymore.
Foreign funds received before September, 2010 were open to scrutiny
Before the change approved last week, foreign funds received by a political party before September 26, 2010, when the FCRA was enacted, were open to scrutiny. Once Clause 233 in the Finance Act 2016 was passed, BJP and Congress simultaneously withdrew appeals in the Supreme Court against a Delhi High Court verdict that held them in violation of the law on foreign funding.