The introduction of foreign funds will fundamentally alter the nature of Indian politics.
For sometime now, the BJP and those affiliated to it, obvious or behind-the-scene, have been asking the question “who’s funding you?” They put this question to Kanhaiya Kumar on his plane tickets. Arnab Goswami opened the famous February 9 episode of his show by asking Umar Khalid who was funding him, and several NGOs like Greenpeace have gone hoarse trying to answer innumerable people voicing this sinister question.
Foreign agents, we are made to believe, are funding these NGOs and anti-national leaders for their nefarious anti-Indian agendas. The capital buys them influence in policy-making is the prevalent argument, and it is true, but the good news is that the government is levelling the playing field. Thanks to its tweaking of the FCRA (Foreign Contribution Regulation Act) passed as a money bill in the last budget session, one can finally ask all political parties, including the BJP and Congress, who is funding them.
As it stood before the amendment, the FCRA prevented political parties from receiving funds from any company with more than 50 per cent FDI – that is, if more than half of the company is held by “foreign sources”.
In practice, though, the issue came to the limelight when civil society organisation Association for Democratic Reforms and EAS Sarma, a retired Indian Administrative Service officer and former Union secretary, filed a public interest litigation in the Delhi High Court in 2014 alleging that both the Congress and the BJP had accepted political funding from Sesa Goa and Sterlite – daughter companies of the Vedanta Group based out of the UK, qualifying as a foreign source, between 2004 and 2012.
The Delhi High Court found both parties guilty in March 2014, and they have since filed a joint appeal in the Supreme Court which is still pending, bringing us back to the amendment passed in the last budget session.
Ostensibly, the proceedings were initiated when Union Finance Minister Arun Jaitley received a letter from at least 22 corporates including Axis Bank and Infosys in 2014 about difficulties in spending their mandatory two per cent corporate social responsibility (CSR) spending to the tune of Rs 10,000 crore because of limitations imposed by the FCRA in its existing form.
However, after passing the amendment as a money bill, bypassing the Rajya Sabha in the process, and much subsequent dilly-dallying, the government – specifically minister of state (home) Kiren Rijiju – admitted earlier last week that the new FCRA amendment allows foreign companies to donate to political parties in the name of CSR spending.
The amendment put in place changes the definition of a “foreign source”, which earlier implied any company with more than 50 per cent FDI, essentially, to any company listed in India regardless of its present shareholding pattern.
Moreover, this amendment is to be retroactively implemented, thereby absolving the BJP and Congress both from their conviction by the high court, since by the new definition, Vedanta would not be a foreign source.
This may explain why the Congress – opposed to the GST Bill – is supporting the government on this one. However, much more worrying are the government’s own erstwhile concerns about the consequences of foreign funding to NGOs or the anti-nationals. By the government’s own logic, capital buys influence, and the influx of foreign funds into our political parties would also come with favours and the said party would then owe the corporate.
Experts, including Sarma, believe the introduction of foreign funds will fundamentally alter the nature of Indian politics. What the new direction would look like is easily visible from the trajectory of American politics and especially the Republican Party, which receives unlimited funding from corporate sources, and its current presidential candidate Donald Trump.
Also at present, the subsidies and tax cuts already being provided to multi-billion dollar enterprises are only going to get worse, since such corporate lobbies will have excessive influence on the government and policymaking, and given the BJP government’s strong affinity to free market and large corporates, the party is likely to be the biggest beneficiary of such funding.
The process by which the amendment was introduced in the first place is, however, being questioned in court. A Business Standard editorial described it as “legislative impropriety”, while Janata Dal United leader KC Tyagi attacked the government for bringing the amendment through the money bill route, saying it “endangered democracy”.
Also of importance is the government’s crackdown on the funding for NGOs such as Greenpeace, which has been severely curtailed citing the same FCRA that the government is evading.
How political outfits plan to evade the downsides remains a puzzling question, but the bill, meanwhile, has already been in effect for two months now.
It makes one wonder who is funding the government, doesn’t it?