FCRA AMENDMENT – BIPARTISANISM OR COLLUSION

The amendment, through Finance Bill 2018 (cannot be objected to in the Upper House of Parliament), which reads as ‘In the Finance Act, 2016, in section 236, in the opening paragraph, for the words, figures and letters “the 26th September 2010”, the words, figures and letters “the 5th August 1976” shall be substituted.’, saw a smooth passage in the Lower House, one that is otherwise notorious for regular adjournments and near-zero output.

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FCRA AMENDMENT – BIPARTISANISM OR COLLUSION
FCRA AMENDMENT – BIPARTISANISM OR COLLUSION BY Dr. Sunil Gupta
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Cooperative federalism and a joint force to rid the country of all problems, social, economic or political, come to display only when the matter is related purely to politics. The amendment, through Finance Bill 2018 (cannot be objected to in the Upper House of Parliament), which reads as ‘In the Finance Act, 2016, in section 236, in the opening paragraph, for the words, figures and letters “the 26th September 2010”, the words, figures and letters “the 5th August 1976” shall be substituted.’, saw a smooth passage in the Lower House, one that is otherwise notorious for regular adjournments and near-zero output.

Section 236 of Finance Act 2016 had inserted a clause (with effect from 26th September 2010) in Foreign Contribution Regulation Act (FCRA) 2010 that altered the definition of foreign company in a manner that where foreign shareholding in the company was even more than one-half, it shall not be considered a foreign source provided that such shareholding is within the limits specified for foreign investment under the Foreign Exchange Management Act (FEMA), 1999.

In effect, the government has provided immunity to both major political parties of India, BJP, and Congress, from any indictments or convictions with respect to foreign funds received by them after the introduction of FCRA in 1976 (Act of 1976 was repealed and replaced by FCRA, 2010).

When a petition over this matter was filed in the court, the Home Ministry (which has the sole right to initiate an inquiry into illegal foreign funding) was asked to take action. Now that the Act itself has retrospectively been amended, the Ministry has a valid excuse for not taking any action in the matter. What should one call this? – A perfect case of bi-partisan unity or collusion between two parties with the view to saving their ships in troubled waters.

The BJP-led government has grabbed international headlines for its reformist stance and PM Modi is one of the most followed world leaders. From scrapping higher currency notes to curb corruption and black money to the introduction of a new indirect tax regime, GST, for increasing tax base and compliance, the present government has taken measures that will surely pay in the long-run; even global rating agencies and multi-lateral institutions have hailed these initiatives.

But when it comes to political reforms, why don’t we see a similar position? Should we not ask- what after Modi? To correct the anomalies prevailing in our system, from banking mess to high corruption, it is time that the Indian polity is cleansed of all its loopholes that allow politicians stay in power despite cases pending against them and political parties function opaquely.

The dominating force in today’s politics is the coalition of ideologically differing political parties that join forces for the sole purpose of grabbing power that otherwise may slip into the hands of some other coalition.

Gone are the days when Congress could win an easy majority. The rise of regional political parties that wield significant power owing to their support coming from specific castes and social groups did no good to the federal politics of India, rather deteriorated the scene. People must know that UP bypolls of 2018 were not the first instance when SP and BSP forged an alliance; they did so in 1993, BSP has even partnered with BJP for the sake of forming a government. Numerous other cases, including arch rivals JDU and RJD joining forces in Bihar, can be cited.

Let us now look at the Tenth Schedule of the Indian Constitution which was added to curb the practice of defection by winning members of parliament and state assemblies. It can be said that the paramount intention behind making a provision of disqualification of an MP/ MLA when she voluntarily quits a political party or votes against the whip was to preserve the ideology followed by the party on whose ticket the candidate won the support of the electorate.

Since we have political parties which publicly subscribe to left-wing, right-wing, center and far-right political ideologies, it is clear that they would adopt a dissimilar approach toward taking the nation to a path of inclusive development. How could then one justify these groups forming a pre-poll or post-poll alliance when any one political party fails to win the majority? But compromises are a tactical move in politics.

Can one then not say that either the Tenth Schedule is a sham or forming pre-poll and post-poll alliances is a clear case of deceiving the electorate that voted for separate ideologies?

More often than not, parties forming alliances quarrel over which MP/ MLA from which party from the coalition gets which ministerial berth. Key portfolios, like Finance and Home (center or states), are generally assigned to leaders coming from the party that wins maximum seats. The irony is that in a country where bureaucrats are selected through competitive exams, politicians are allotted ministries only on the basis of their political clout.

Take another case. When a businessman pays kickbacks to a minister or government official (often she is compelled to do so to cut short delays in getting requisite permissions/ clearances), the business faces the heat of investigating agencies; many time cost overruns and bank NPAs are direct consequences of failing businesses. But when to form a government or prove majority in the House, horse-trading is resorted to in open and politicians are offered lucrative ministries in lieu of their support, no anti-corruption watchdog cares.

The electorate, more so after the 2014 polls where a single party could win a majority, is hopeful of a political scene where skills not influence is the criteria for allocation of tickets and ministries. The way the government amended the FCRA Act is not in line with how the Modi-led cabinet is expected to run the country. Ushering in an era of transparency in Indian political landscape is the need so that the goods of one government are not overridden by any succeeding party/ coalition.

It is clear that PM Modi wants a changed India, inclusive and developed, and his policy initiatives are in the right direction. But for these reforms to stay for a long time, polity has to be re-shaped. Bringing onboard corrupt leaders who leave their respective parties over the rejection of Rajya Sabha seats or a ticket in elections can never lead to a new India. One day, Narendra Modi, like all his predecessors, will be out of the picture and the country will be led by some other leader, from BJP or any other political party or an alliance.

He must prepare the ground for that very day. Political reforms, including an elimination of corrupt and self-seeking politicians and transparency in the functioning of political parties, are a necessity, more so to ensure that social and economic policy actions of the present government are able to survive in the long-run.

 


About Dr. Sunil Gupta:

Dr. Sunil Gupta is a financial and economic expert and provides regular suggestions to the Reserve Bank of India, Department of Financial Services (DFS) and the government of India on public policy issues. he has delivered effective restructuring modules for the revival of distinct business houses; while on the other, he has been serving nation’s leading financial institutions and Associations as a member of Board. His membership of FICCI National Executive Committee and a former director of Punjab National Bank and Dena Bank are a part of this. The Government of India has nominated him as a Director of General Insurance Corporation of India and Rural Electrification Corporation Limited. He bears on his shoulders the responsibility of servicing Steel Consumers’ Council, Ministry of Steel as an active member. Handling multiple tasks has never been a concern.

He is a member of ASSOCHAM, CII, PHd chambers of commerce and Industry, and the Press Club of India. He writes regularly about political, economic and social landscapes of India on his blog and Linkedin, besides contributing to multiple reputed media platforms. His blogs on Linkedin have garnered wide appreciation and have achieved tens of thousands of views and hundreds of likes, shares, and comments. Dr. Gupta’s opinions are politically neutral and they focus primarily on development and correction in flawed policy decisions. His last book ‘Thoughts Gallery’ was forwarded by Former Election Commissioner of India.