Political Parties Can Now Receive Funds From Foreign Firms: Here’s What you Need to Know

The FCRA, or The Foreign Contribution Regulation Act 2010 has been amended to allow foreign companies to make donations to NGOs in India, as well as political parties. Introduced during the Finance Bill, the amendment was passed by the Lok Sabha in the recently concluded Budget Session. Minister of State (Home), Kiren Rijiju, speaking to The Hindu, said “Donations made by such [foreign shareholding] companies to entities including political parties will not attract provisions of the FCRA, 2010.” This statement must be taken note of as it makes clear that these donations will not be subjected to any kind of government inspection. According to Representation Of The People Act, political parties are prohibited from taking funds from foreign entities.

This amendment found support from both the Congress and BJP camps. A case dealing with their alleged use of funds received from the Vedanta Group is currently ongoing at the Supreme Court. In this context the amendment becomes even more significant.Parties like the CPI-M and Janta Dal(U) have criticised the move, claiming that it is capable of harming the institution of democracy that is supposedly one of the cornerstones of modern India.









According to Mr. Rijiju, “As per the existing provisions any Indian company will fall in the category of foreign source if at any time more than 50 percent of its shareholding is acquired by foreign entity and would require to seek approval under the FCRA to implement its corporate social responsibility (CSR) activities as mandated under Section 135 of the Companies Act. Moreover the problem multiplies for listed companies as the shareholding pattern fluctuates on a daily basis. As such, such entities can transfer funds only to associations registered or granted prior permission under the FCRA.”



He also said that Indian companies that have foreign holdings may contribute funds within the FDI limit. This will not be counted as a foreign donation. “As these are still Indian companies registered and governed under the Indian laws for companies, treating their CSR contributions as “foreign contribution” under FCRA creates complications for the donor companies as well as the recipient associations. Similar problems have also come to notice in cases of donations by such companies to various political parties by such companies,” he concluded.




That the government brought about this amendment in such a hushed manner indicates that they fear backlash in case the matter receives wide publicity. It is indeed ironic that such a move, which is likely lead to greater foreign influence on the workings of the Indian Government and political parties, has been introduced by the very party whose members pretend to be deeply fervent patriots and worshippers of all things Indian. They swear by the greatness of their “Bharat”; they imprison students who dare to voice their support for a people’s right to self determination through slogans in the name of protecting the sovereignty of the nation. In fact, one prominent Rajya Sabha member from this party, Subramanian Swamy, recently made headlines when he labelled RBI governor Raghuram Rajan as “mentally not fully Indian”, because he holds a green card. It must also be noted that the Congress, a party that faces several allegations of corruption, has welcomed this amendment.





Swamy, Rajan
Swamy, Rajan




National media has been majorly silent on this recent development. How long will 1.2 billion people allow themselves to be fooled by powerful manipulative groups using symbols and hollow “ideologies” to strengthen their own positions and increase their wealth is what waits to be seen.




Written by: Proiti Seal Acharya





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