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The former secretary, ministry of finance, government of India, has been fighting against the deficiencies of the Indian democratic system. He spoke to USHA RANI DAS. Excerpts:

What is the reason for the government’s delayed response to FCRA violations by political parties?

This is a question that the government should be asked to reply. The way it proceeded after the 2014 judgment of the Delhi High Court on FCRA showed that it had no hesitation whatsoever in allowing foreign companies, including multi-nationals, to set up subsidiaries controlled by them in India and channel funds to the political parties. To facilitate this, the government went out of the way to amend the FCRA, 2010 retrospectively, through the backdoor of this year’s Finance Act. Therefore, the delay in responding to the court order has not been a routine one but a measured delay aimed at regularizing foreign donations somehow.

Though the 2010 FCRA stands amended, there were violations of the earlier FCRA committed by both the national political parties, for which they need to be proceeded against under that Act and under the Representation of the People Act.

Should political parties be allowed foreign funding?

Whether NGOs or political parties, it is highly undesirable to permit them to receive foreign funds, as those giving donations do not do it out of charity or magnanimity or some other good intention. There are huge quid pro quos involved in such donations. Foreign political donations tend to taint the electoral process, erode its credibility and compromise the national interest.

How will the recent amendment to FCRA affect the current situation?

The recent amendment has opened the floodgates to foreign funds flowing unhindered into India’s elections. The only ceiling on the funds that each foreign company can hereafter give to the political parties is the proportion (7 1/2 percent) of the average profits during the previous years [Section 182(1) of the Companies Act], a proportion that is ironically much higher than what they can set apart towards Corporate Social Responsibility! Once foreign companies have this channel, one should not be surprised if they continue to seek quid pro quos through policy changes on an increasing scale, that would benefit them, against the public interest.

What is the solution?

It is sad to see these days that, in the name of “serving the people”, our political leaders carry out election campaigning in extravagant ways including holding expensive rallies, flying all around the country in aircraft belonging to business houses and so on. This is outright electoral corruption, as, once they get elected, their mission during the next five years is to benefit the business houses more than the people. It is no wonder that political parties have declared themselves above the requirements of RTI, as none of them seems to function in a transparent manner.

In my view, political donations from domestic corporate houses are bad enough, as they place the promoters of big business houses at an advantage over the ordinary citizen, resulting in policies being tweaked to benefit the former to the detriment of public interest. If this facility is extended to foreign companies, it can be worse, as it will then compromise national interest. The solution, therefore, lies in prohibiting all kinds of corporate donations, pressurize the political parties to be austere in their campaign expenditure and fund the same from the budget by creating an Election Fund.

Aren’t these political parties like NGOs claiming to be working for the public and collecting funds from donations?

Yes, our political parties wish to apply one standard for the NGOs and another for themselves. If foreign funding has often interfered in the way several NGOs carry out their work in the country, corporate funding, especially foreign corporate funding, accepted by political parties, has done greater, long-term damage to the national interest, as it has tended to vitiate the sanctity of the electoral process. Giving away natural resources such as land, minerals etc at a throwaway price to the donor companies, interfering in quasi-judicial processes to save them from penal action and such other benefits are also a part of the quid pro quos.

Lead Picture:  (L-R)It is time all political parties came clean on the sources funding the colossal amounts spent on election campaigns. Photo: UNI; EAS Sarma, former secretary, ministry of finance, government of India

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