Lok Sabha passes Bill to exempt political parties from scrutiny on foreign funds, without debate

Lok Sabha passes Bill to exempt political parties from scrutiny on foreign funds, without debate

What has happened?

The Lok Sabha, passed without a debate a bill that will exempt political parties from scrutiny of funds they have received from abroad since 1976

Background: amendments done to the Finance Bill 2018

• Amendment to the Foreign Contribution (Regulation) Act, 2010 that bans overseas corporations from funding political parties
• Through Finance Bill 2016 passed earlier, the government had amended the FCRA to make it easier for parties to accept foreign funds

Which act bars political parties from accepting foreign funds?

Representation of People’s Act: It lays down the rules for elections &bars political parties from accepting foreign funds

Effect of the amendment

The retrospective amendment will help BJP and Congress escape the fallout of a 2014 Delhi High Court judgement that held both guilty of violating the FCRA.

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• It was later repealed and replaced with the FCRA, 2010.

Definition of a foreign company changedin 2016

• The BJP government, through the Finance Act, 2016, had also 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.

Fact

This is only the third time since 2000 that Parliament has approved the budget without debate.