Foreign firms can now fund parties

The government has admitted that the amended Foreign Contribution Regulation Act (FCRA), 2010, which they brought in through the Finance Bill route, will not only help foreign-origin companies to fund NGOs here but has also cleared the way for them to give “donations to political parties.”

Details:

• The amendment, which was cleared by the Lok Sabha in the recently concluded Budget session, will ensure that “donations made by such [foreign shareholding] companies to entities including political parties will not attract provisions of the FCRA, 2010.”
• The government has brought the changes with retrospective effect.

Background:

The statement assumes significance as such funding from foreign donors will bypass government scrutiny. The Representation of the People Act bars political parties from receiving foreign funds.