Published On: Tue, Mar 20th, 2018

NEW DELHI: The Lok Sabha has passed, without 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 opposition protests 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 parties.

The RPA, which lays down rules for polls, bars parties from accepting foreign funds. The Centre 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 remove scope for scrutiny of a 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 judgment 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 It was later repealed and replaced with FCRA, 2010.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% 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.

 

 

 

 

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