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The Daily Fix: Unchecked foreign funds for political parties will endanger Indian democracy

Everything you need to know for the day (and a little more).

The Big Story: Outbidding the Indian voter

The Finance Bill is supposed to be an account of the Union government’s income and receipts. Yet increasingly, the Modi government is using it as an omnibus tool to push across all manners of fundamental – and worrying – changes. The Finance Bill 2018, tabled in Parliament, has buried deep within in, a sentence that could change the nature of Indian political funding. The sentence proposes not only to allow foreign corporations to fund Indian elections, it actually says that the new rule will apply retrospectively, dating back all the way to 1976.

This would repudiate the Foreign Contributions Regulation Act, passed in 1976. Alive to the dangers to Indian sovereignty, the act barred Indian political parties from accepting funding from foreign entities.

Fast-forward to 2010: the Delhi High Court ruled that India’s two largest parties, the Bharatiya Janata Party and the Indian National Congress, were both guilty of violating the FCRA. They had accepted funds from Vedanata, a British mining firm, and a few others.

In 2016, the Finance Bill sought to overturn the Court’s order. It sought to retrospectively redefine what a “foreign source” is, so as to let the Congress and BJP off the hook. This rule was retrospectively dated to 2010.

But in a bit of comedy, it was discovered that the two parties had accepted foreign donations even before 2010. To remedy this, the Finance Bill 2010 now seeks to retrospectively change the definition of “foreign source” all the way back to 1976 – by more than 40 years.

This episode casts a shadow on the state of India’s democracy. India’s largest parties have come together to overturn a High Court order holding both of them guilty for accepting foreign funds. Moreover, while trying to get themselves off the hook, the two parties joined hands to completely change how Indian elections are funded. The agreement to make foreign contributions acceptable is a troubling development – but not the only change in how Indian elections will be funded. In March, 2017, Parliament passed a bill that actually removed the cap on how much money corporations can donate to political parties. In January, a scheme for anonymous electoral bonds was announced, allowing untraceable capital to influence Indian politics from the shadows.

Political financing is a hot-button topic for even the mature democracies of the West. In the wake of a 2010 United States Supreme Court order that allowed corporations to spend unlimited amounts on political campaigns with no disclosure, political funding has exploded in the United States, leading to fears that a few superwealthy individuals could override the American voter in influencing government policy.

With corporations – both Indian as well foreign – now free to donate unlimited amounts to political parties, Indian democracy is in grave danger of being overwhelmed by capital, responding not to genuine voter demands but the dictates of its super funders.

The Big Scroll

  • The fine print: Groups of individuals, NGOs can buy electoral bonds without public disclosure, reports Nitin Sethi.
  • In name of transparency, BJP has made it easier for parties to get anonymous corporate funds, points out Rohan Venkataramakrishnan.
  • Running a party and contesting elections costs money. Here’s how the Telugu Desam Party and Telangana Rashtra Samiti rake it in, writes GS Radhakrishna.
  • What transparency? Anonymous electoral bonds will make Indian politics even more hazy, writes Shoaib Daniyal.

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  • In the Times of India, Bharatiya Janata Party MP Swapan Dasgupta considers the possibilities if Narendra Modi lost the 2019 Lok Sabha elections.
  • New Delhi has very little moral, legal and political locus standi to justify an intervention in the Maldives, argues Happymon Jacob in the Hindu.
  • Vote cutting: One cannot simply dismiss the possibility that the motivations of many of the small candidates – whose vote shares remain below 2% of the total vote – may be problematic, argue Simon Chauchard and Hanmant Wanole in Mint.
  • Why are we so charmed by Shashi Tharoor’s English, asks Amulya Gopalakrishnan in the Times of India.


Don’t Miss

Finding their voice: IIT students across India are demanding a bigger say in campus affairs, reports Shreya Roy Chowdhury.

“The push for more active student politics on IITs campuses is not popular. Given their close alliances with business corporations and anxieties about employment for their graduates, the IITs are wary of any activity they see as being disruptive. In fact, even many students are unsympathetic to campaigns they see as ‘doing politics’.

‘We are accused of smearing the reputation of IIT Kharagpur, of trying to turn it into Jawaharlal Nehru University or Jadavpur University,’ said one research scholar. Both these universities are known for unabashedly political student activism that often spills out of the campuses and onto the streets. ‘Professors also discourage students, especially BTechs [or undergraduates], from joining,’ he said.”

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