politics

No Questions Asked: India Changes Law on Foreign Poll Funding

  • Lawmakers passed $376 Billion budget, boosted MPs’ wages
  • Long-term capital gains tax of 10 percent also introduced

The Indian Parliament building in New Delhi.

Photographer: Anindito Mukherjee/Bloomberg

India’s government yesterday bypassed debate to adopt its annual budget plan worth $376 billion and rushed through changes to protect political parties from legal consequences of breaking election rules on foreign funding received in past campaigns.

Amid chaotic protests by the opposition, the government amended the Foreign Contribution (Regulation) Act, 2010 that bans overseas corporations from funding Indian political parties as part of the budget process.

That frees Prime Minister Narendra Modi’s Bharatiya Janata Party and its largest rival Indian National Congress from the fallout of a Delhi high court judgment in 2014 that held both guilty of violating the act. The change was made retrospectively.

"It may be technically legal but was certainly inappropriate," said Jagdeep Chhokar, founder of Delhi-based Association for Democratic Reforms. "And the amendment of a 42-year-old law that frees India’s biggest political parties from legal scrutiny on receiving overseas political funding was done in a dubious way. All of it was done in half an hour. No questions asked."

It’s only the third instance since 2000 that parliament has officially avoided debate on significant legislation, Chhokar said.

Wednesday’s session also allowed -- without debate -- salary hikes for members of Parliament and passed a long-term capital gains tax of 10 percent on listed equities valued over 100,000 rupees bought after Jan. 31, 2018.

The parliament had been unable to pass any bills in the preceding eight days amid opposition protests over the $2-billion Punjab National Bank scam.

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