Why Finance Bill 2018 seeks to okay illegal foreign funds to political parties by 36 years
It lies innocuously at the fag end of the main Finance Bill 2018, the document available on the official website of the Union Budget 2018. In Part XIX of the list of amendments, the “Amendment to the Finance Act, 2016”, entry number 217, reads: “In Finance Act, 2016, in section 236, in the opening paragraph, for the words, figures and letter “the 26th September, 2010”, the words, figures and letter “the 5th August, 1976” shall be substituted.”
And thus, in one stroke, the Finance Bill 2018 will push back the retrospective legalisation of illegal foreign funds to political parties, chiefly the BJP and the Congress, from the erstwhile 2010, which they had done via the 2016 Finance Act, to 1976. The Finance Act 2016 had tweaked the Foreign Contribution Regulation Act, 1976 to change the definition of what constitutes a foreign company in such a way that key beneficiaries of the UK-based mining behemoth Vedanta group, both the BJP and the Congress, would escape legal ire.
While Finance Act 2016 had extended the latterly legalised period of foreign contribution to 2010, thereby giving the political parties a leeway of six years, the Finance Bill 2018 wants to take it back all the way to 1976, when FCRA was enacted by the Indira Gandhi government, in order to strangle “foreign contribution” to organisations, particularly the Opposition parties and NGOs, in a bid to minimise dissent.
While the original FCRA of 1976 had defined a foreign company as one with over 50 per cent foreign ownership, thereby disallowing the companies owned by foreign nationals or Indian-origin people based abroad and with foreign citizenship, to fund and influence political parties in India, the amendment moved in 2016 via the Finance Act sought to change what it meant to be a foreign company altogether.
The Finance Act 2016 sought to redefine foreign companies as “Indian” when the percentage of their ownership of a company was within the FDI limits within that sector. In other words, irrespective of the ownership structure, foreign companies could contribute if the FDI allowance was within limits. The backdated contributions up to 2010 were legalised after Delhi High Court in 2014 had found both the Congress and the BJP guilty of accepting funds from London-based Vedanta group.
In a climate of more and more FDI allowance, the Finance Bill 2018 will extend the backdated contribution all the way to 1976, when the original act came into existence. Since Finance Bill is a Money Bill, it would not be facing hurdles in Rajya Sabha, and the ruling BJP with its sheer strength in Lok Sabha (currently at 275, after losing the bypolls in Rajasthan), will bulldoze the Finance Bill into passing. This means, all the foreign contributions ever would be legalised for these parties with deep pockets.
The grave irony of the government going all the way back to 1976 to legalise illegal foreign funding of political parties, in contravention of the Representation of People Act, 1951, lies in the enormous crackdown on foreign funds and aids received by NGOs. Senior advocates and rights activists duo Indira Jaising and Anand Grover were repeatedly harassed and the FCRA licence of their legal NGO Lawyers Collective was revoked by the home ministry for supposedly violating minute FCRA provisions. Similarly, Greenpeace India's operations faced tremendous funding crisis, and Teesta Setalvad’s Citizens for Justice and Peace had its bank account frozen over alleged FCRA indiscretions.
And these more renowned names are just a handful among an ocean of targeted NGOs, particularly those working in social justice and human rights sectors. In 2016, Narendra Modi government cancelled the licences of 20,000 NGOs and in 2017, 4,842 cancellations took place, over supposed violations of FCRA.
Yet, the government seems to have a completely different standard when it comes to political parties and the surreptitious donations they receive from foreign entities that leave a substantial imprint on our domestic economic and social justice policies. Hypocrisy writ large, isn't this?