Foreign funding of political parties
Topic: Electoral Reforms: Money, Criminalisation and Simultaneous Elections · NCERT: Beyond NCERT
Meaning
Indian political parties cannot take money from foreign sources. The ban is in the Foreign Contribution (Regulation) Act (FCRA) 2010. The aim is to stop foreign interests from shaping Indian politics. However, what counts as a "foreign source" depends on the FCRA's definition. Parliament has changed that definition with retrospective effect, which means the change applies to past years as well.
Example
In 2014, the Delhi High Court found that the BJP and the INC had taken donations from a foreign source. In 2016 and 2018, Parliament amended the law retrospectively to narrow the meaning of "foreign source". This took away the legal basis of that ruling.
Don't confuse with
- Corporate donations under Section 182 of the Companies Act 2013: Indian companies may legally donate to parties. A company must be at least three years old, may give up to 7.5% of its average net profit and must disclose the gift. Government companies cannot donate.
Related concepts
- Money power in elections
- Election expenditure limits
- Star campaigner
- Section 29C of the RPA 1951
- Section 13A of the Income Tax Act 1961
- Cash donation limit
- Corporate donations to political parties
- Electoral trusts