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बेसिक इंग्लिश का दूसरा सत्र (कक्षा प्रारंभ : 22 अक्तूबर, शाम 3:30 से 5:30)
Q. Amendment to Foreign Contribution Regulation Act: It raises doubts on government's reputation for ethical governance and legislative propriety. Comment
Apr 07, 2016 Related to : GS paper 2 and 4.

Ans :


The Foreign Contribution (regulation) Act, 2010 (FRCA) is passed by parliament to regulate the acceptance and utilisation of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit acceptance and utilisation of foreign contribution or foreign hospitality for any activities detrimental to the national interest.

Clause (e) of sub-section (1) of section 3 of the above acts prohibits political party or office-bearer of it from accepting foreign contributions.

Why in news?

Recently Government (through Parliament) amended FRCA retrospectively (from 2010) through Finance bill 2016. According to this amendment donations to political parties by Indian companies with foreign direct investment within mandated sectoral limits will no longer be considered foreign contributions.

The Moot Point-

  • According 2014 Delhi High Court ruling, the 2 major national parties were found guilty for violating FCRA rules by accepting funds from two Indian subsidiaries of the London-based Vedanta Group. The penalty for this includes imprisonment of between three and five years and a fine or both. The appeal is pending in Supreme Court and the apex court did not stay the high court's decision. This retrospective amendment will enable both parties to deflect criticism of having wrongly received donation from companies in violation of the existing law.
  • Though it is an issue that involves political party funding and it falls under the home ministry, not the finance ministry. The amendment is no way related to taxation, expenditure or borrowing of the Government of India or any appropriation or receipts to the Consolidated Fund of India. Still these amendments were included in the Finance Bill, 2016, which is a Money Bill under the Constitution. It means that the Rajyasabha can neither amend nor reject it once the Bill is passed by the Loksabha, even it cannot refer it to a joint committee of the Houses.  Again it shows the abuse of legislative mechanism.


It case where government is leveraging its political dominance to subordinate due legislative process. This retrospective amendment raises various doubts ethicality and propriety on both ruling as well as main opposition party, which is silent on this issue. It’s time to dump such regressive political practices. Government and opposition should ensure ethicality and transparency in legislative process.

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