By Arsh Rampal
The Lok Sabha on 13th March 2018 passed within 30 minutes several amendments to the Finance Bill. The amendments were passed without any discussion in the House and were adopted by the Speaker using the parliamentary procedure of ‘guillotine’ while several MPs opposed the move. Also, the amendments made to the FCRA will have a drastic impact on the status of foreign funding to political parties in India.
What is the FCRA?
The Foreign Contribution (Regulation) Act, 2010 is an act passed by the Parliament to regulate foreign funding which can be utilised for any activity which may potentially be detrimental to the national interest. The Act was first formulated in 1976, after which it was repealed and re-enacted in 2010. Prior to the Act, political parties were barred from accepting foreign funding, as it would likely have influenced the decisions of the Parliament which could be detrimental to national interests. The FCRA, however, makes it legal for political parties to accept foreign contributions.
The effect of the amendment
The major amendment which was recently made to the FCRA was one which exempts political parties from scrutiny regarding funds they may have received from abroad since 1976. An amendment was previously made to the Act in 2016 which made it easier for foreign companies to make contributions to political parties in India. The current amendment has a retrospective effect on the FCRA, as it changes the applicable date of the Act from 2010 to 1976. This has the effect of making all foreign funding accepted by political parties since 1976, legal.
Probable cause for amendment
The Delhi High Court in 2014 held the Bharatiya Janata Party (BJP) and the Indian National Congress (INC) guilty of receiving foreign funding from two subsidiaries of the Vedanta Group, based in the United Kingdom. The 2014 amendment was made in response to this decision of the High Court. The amendment, however, did not have the desired effect upon the High Court ruling as the parties were held guilty of receiving funds before 2010 when the Act was not applicable. The current amendment, however, protects the two parties from judicial proceedings with respect to any foreign funding they accepted after 1976. It is most likely the cause of the current amendment.
Why it matters
The amendments are a matter of concern for a few major reasons. The first cause of concern is that amendments to the Finance Bill were passed without any discussion upon them. The Finance Bill is an important piece of legislation which regulates all financial aspects of governance in India. In a democracy, it is necessary that all factors of governance are deliberated upon in the Parliament before decisions can be taken on them. The passing of such a crucial piece of legislation without any discussion in the Parliament hampers the spirit of democracy.
The second cause of concern is that the amendments will reduce the transparency of political funding in India. The purpose of the enactment of the FCRA was to allow foreign funding to Indian political parties, as it was needed due to the growing open economy. This foreign funding, however, was subject to a large number of checks because of which, only a few foreign companies could donate money to the political parties. The latest amendments passed by the Parliament increase the scope of the Act to such an extent that the Act loses its purpose. This may be harmful to a democratic society as it reduces both, the transparency in political funding as well as the accountability of political parties in the country.
The state of political affairs in the country has touched a new low with the passing of these amendments. The move was supported by both the BJP as well as the opposition INC, so it is unlikely that the legislature will do anything to correct its decision. The Supreme Court could take cognisance of the matter to evaluate the validity of the amendment, either on a ‘suo motu’ basis or if it is challenged by way of a petition. A decision by the apex court to invalidate the amendment seems to be the only practical way to uphold the spirit of democracy, at the moment.