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Changes in laws on political funding have serious repercussion: EC to SC

Changes in laws on political funding have serious repercussion: EC to SC
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New Delhi: The Election Commission informed the Supreme Court on Wednesday that it had written to the Centre saying the changes made in several laws relating to political funding will have "serious repercussions" on transparency.

It also said that the changes in the FCRA 2010, will allow unchecked foreign funding of political parties which could lead to Indian policies being influenced by foreign companies. EC, which has filed affidavit in the apex court, said that on May 26, 2017 it had written to the Ministry of Law and Justice about its views that the changes made in the Income Tax Act, the Representation of People Act and the Finance Act would be against the endeavour to have transparency in funding to political parties.

The affidavit, filed by Director (Law) of the EC Vijay Kumar Pandey, said the EC had informed the ministry that "certain provisions of the Finance Act, 2017 and the corresponding amendments carried out in the Income Tax Act, the RP Act, 1951 and the Companies Act, 2013 will have serious repercussions/impact on the transparency aspect of political finance/funding of political parties".

The reply was filed in petitions challenging the issuance of electoral bonds by the government.

Referring to its communication with the ministry, it said: "It is evident that any donation received by political party through an electoral bond has been taken out of the ambit of reporting under the contribution report as prescribed under section 29 C of the RPA.

"In a situation where electoral bonds were not reported, it cannot be ascertained whether the political party has taken any donation from government companies and foreign sources."

On changes to the Foreign Regulation Contribution Act (FCRA) 2010, it said they allowed donations to be received from foreign companies having majority stake in Indian companies provided that they follow the guidelines pertaining to foreign investment in the sector in which they operate.

"This was a change from the existing law barred donations from all foreign sources as defined under the FCRA. This would allow unchecked foreign funding of political parties which could lead to Indian policies being influenced by foreign companies," it added.

In response to ADR's plea which also sought directions that no political party should accept any donation in cash, ECI said that the Income Tax Act has been amended with a new clause stating that no cash donation exceeding Rs 2000 was received by such political party. "ECI has been relentlessly working towards curbing the abuse of power during elections for which purpose it has time and again issued several instructions in the past to candidates as well as to political parties for furnishing the correct information relating to donations received and expenditure," it said.

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