Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 73
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 74
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Warning (512): Unable to emit headers. Headers sent in file=/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php line=853 [CORE/src/Http/ResponseEmitter.php, line 48]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 148]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 181]
Notice (8): Undefined variable: urlPrefix [APP/Template/Layout/printlayout.ctp, line 8]latest-news-updates/legislative-impropriety-4679044.html"/> LATEST NEWS UPDATES | Legislative impropriety | Im4change.org
Resource centre on India's rural distress
 
 

Legislative impropriety
-Business Standard

FCRA amendment raises questions about ethical governance

The little-noticed announcement in the Finance Bill to retrospectively amend a clause in the Foreign Contribution Regulation Act (FCRA) does little to enhance the government's reputation for ethical governance. The amendment, to apply from 2010, will mean that donations to political parties by Indian companies with foreign direct investment within mandated sectoral limits will no longer be considered "foreign contributions". The FCRA bans political parties from receiving funds from a foreign entity, which is defined as one where 50 per cent or more equity is owned by a foreign enterprise.

In itself, the amendment may be defensible. Companies registered in India, even with majority foreign equity, have as much of a stake in Indian politics as wholly-owned Indian concerns, and there is no reason to prevent them from donating to political parties in a transparent manner. But 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. It stems from a 2014 Delhi High Court ruling that held both the Bharatiya Janata Party (BJP) and the Congress guilty for violating FCRA rules by accepting funds from two Indian subsidiaries of the London-headquartered Vedanta Group. The penalty for this includes imprisonment of between three and five years and a fine or both. A Supreme Court appeal is pending, but it is worth noting that the apex court did not stay the high court's decision. Retrospectively amending this provision would, in one stroke, let both the political parties off the hook and enable them to deflect criticism of having wrongly received donation from companies in violation of the existing law.

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 chicanery 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. Indian subsidiaries of foreign companies may appreciate this clarification. But having openly repudiated the system of retrospective taxation that created so much controversy under the previous government, the regime's use of the same ruse of backdated legislation to suit its narrow purposes is unlikely to reassure the global investor community about its consistency on such matters. Nor does it enhance the reputation of the Congress as an effective opposition party, as it continues to maintain silence over such impropriety, presumably because it also stands to gain from the legislative amendment.