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Archive for the ‘Ethics’ Category


Foreign Contribution Regulation Act(FCRA)¬†currently bans political organizations from accepting funds from foreign and foreign funded(one where 50% or more equity is owned by foreign entity) entities. Based on this premise Delhi high court in 2014 held two political parties Congress and BJP guilty for accepting funds from London based Vedanta Group’s subsidiary. The penalty for this is 3 to 5 years imprisonment or a fine or both. A Supreme court appeal is pending , But it is worth noting that apex court did not stay the high court’s decision. Now to save themselves from this situation ruling government introduced Finance Bill to retrospectively amend a clause in the¬† FCRA. The Amendment will mean that donations to political parties by Indian companies with foreign direct investment within mandated sectoral limits will not be considered “foreign contribution”.

This amendment may be defensible on the account that it is done to clarify the policy but does little to enhance the government’s reputation for ethical governance. The motive behind this amendment has little to do only with clarifying policy; it is also driven by self-interest that almost amounts to a rank abuse of power. Adding to the misgivings about the opportunism embedded in this amendment is the fact that it has been included in the Finance Bill, 2016, which is a Money Bill under the Constitution. This means that the Rajya Sabha can neither amend nor reject it once the Bill is passed by the Lok Sabha, nor can it be referred to a joint committee of the Houses. This legislative trick becomes explicable only because of the ruling coalition lacking the requisite numbers in the upper House to pass any controversial legislation.

But the real question is how the Speaker can certify this amendment as a Money Bill.

First, the FCRA falls under the home ministry, not the finance ministry.

Second, it is an issue that involves political party funding and in no way entails taxation, expenditure or borrowing of the Government of India or any appropriation or receipts to the Consolidated Fund of India, which are the broad constitutional qualifications for a Money Bill.

Overall, it is difficult to avoid the view that the ruling party is leveraging its political dominance to subordinate due legislative process.

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