LS passes Bill to exempt political parties from foreign funding scrutiny

New Delhi: The Lok Sabha has passed, without a debate, a bill that will exempt political parties from scrutiny of funds they have received from abroad since 1976.

On Wednesday, the Lok Sabha passed amid chaotic protests by the opposition parties, 21 amendments to the Finance Bill 2018. One of them was an amendment to the Foreign Contribution (Regulation) Act, 2010 that bans overseas corporations from funding political parties.

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.

"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 Lok Sabha website said listing amendments to Finance Bill 2018 approved on Wednesday.

The retrospective amendment will help BJP and Congress escape the fallout of a 2014 Delhi High Court judgement that held both guilty of violating the FCRA. The FCRA was passed in 1976. It 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 It was later repealed and replaced with the FCRA, 2010.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, changed the definition of a foreign company by saying a firm with less than 50 per cent of share capital held by a foreign entity would no longer be a foreign source any more. This amendment also came into effect retrospectively from September 2010.

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.

The Lok Sabha on Wednesday adopted the annual Budget for 2018-19 by passing the Appropriation Bill, which authorises government departments to spend money from the Consolidated Fund of India, and Finance Bill, which contains taxation proposals. The approval without debate came even though three weeks remain for the current Budget Session of Parliament.

First two weeks of the session have been almost a washout due to protests over the Punjab National Bank fraud and other issues by opposition parties. This is only the third time since 2000 that Parliament has approved the budget without debate.