Foreign Funds for Politics

The Supreme Court has done well to seek the Union government’s response to an appeal challenging the amendments made to the Foreign Contribution (Regulation) Act (FCRA) of 2010, which it said were introduced solely to bail out the BJP and the Congress after a high court had held the two parties guilty of taking foreign funding. On Monday, a bench of Chief Justice Dipak Misra, Justice A.M.Khanwilkar and Justice D.Y.Chandrachud of the Supreme Court issued notice to the Government of India on the appeal filed by the Association for Democratic Reforms (ADR) seeking declaration that the amendments in FCRA 2010 by Section 236 of the Finance Act, 2016 and by Section 217 of the Finance Act, 2018 are “void, illegal and unconstitutional”. The petitioner contended that the amendments to the FCRA had been introduced with retrospective effect in order to overturn a Delhi High Court order holding the Bharatiya Janata Party (BJP) and the Congress guilty of accepting donations from overseas companies. The plea against the Delhi High Court judgement was rejected by the court according to the plea. The plea contended that the amendments to the FCRA 1976 had “opened doors to unlimited political donations from foreign companies, thereby legitimizing financial contributions received from foreign companies”. The appeal also contended that the amendments were contrary to the principles of separation of powers, and that the amendments made in FCRA 2010 “vide the Finance Act 2016” was already under challenge before the apex court. Surprisingly, when the matter was sub-judice, Parliament, by the Finance Act, 2918, made amendments with retrospective effect from 1976.

Funding of our political parties by foreign sources is a very serious matter because it is something that has serious implications for the sovereignty and integrity of any nation. It may be quite permissible for any sovereign country to accept donations from foreign countries for building infrastructure and for the needs of development. It may be quite permissible for educational institutions, hospitals and major development projects to receive foreign aid to augment inadequate resources as long as such foreign aid is publicly acknowledged. There are many countries in Africa that would remain destitute and starved without foreign aid. These countries need all the help they can get to reach even a very modest level of development. In fact, many countries of the world that have reached a certain minimum level of development would have failed to do so without help from foreign countries that are better off. This is the kind of aid that the United Nations has supported and must continue to support, since the UN itself cannot possibly take on such a responsibility. But foreign aid to political parties is a totally different kettle of fish that cannot be viewed with the same indulgence as foreign aid extended directly to the government of any country. In the first place, no political party is likely to be as open about the extent of overseas financial aid received as a government that is answerable to the people. So people are bound to remain in the dark about the extent of foreign assistance received by a political party. It is thus quite possible for political parties to receive overseas financial assistance far in excess of what is acceptable from such sources. It is thus possible for political parties to come in the grip of foreign powers without the people being aware of what has happened or how many members of a political party have benefited from such financial assistance and to what extent. This is the kind of thing that has happened to lesser ‘democracies’ of Africa and could well happen to bigger democracies that are not short of dishonest politicians quite willing to sell not only valuable resources of the country but the country’s sovereignty and integrity to foreign powers. That is why it is so important for all countries to have very rigid bans imposed on political parties against accepting any kind of foreign funding.