The double-speak of parties on foreign funding

Both the BJP and the Congress united to circumvent the law. Their barbs on China carry little meaning

As India’s border stand-off with China continues, the latter’s aggressive manoeuvres raise difficult questions about India’s diplomatic options, foreign partnerships, and future defence requirements. But the latest crisis has also set off an unseemly round of finger-pointing between the Bharatiya Janata Party (BJP) and its principal national rival, the Congress, with both sides accusing the other of cosying up to the communist regime.

In response to Opposition barbs that the Narendra Modi government’s China policy has been tantamount to “appeasement”, the BJP unearthed evidence that Beijing had previously funnelled money into the Rajiv Gandhi Foundation, a Congress-affiliated brain trust. Caught on the back foot, the Congress took the airwaves to argue that several politically-connected Chinese firms — from Huawei to Xiaomi — have donated millions of rupees to the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM-CARES).

The ugly mud-slinging between the ruling party and its primary Opposition centres on three claims: that foreign adversaries are meddling in domestic affairs; that wayward foreign “donations” are shrouded in a veil of secrecy; and that independent, third party audits are needed to clear the air.

What is left unsaid is that both the BJP and the Congress have worked — often hand-in-glove — to ensure that they themselves are absolved of precisely the kind of scrutiny that they are now demanding. When it comes to transparency, credible auditing, and protections against foreign influence, both parties chant in unison: Do as I say, not as I do.

In a landmark 2013 judgment, the Central Information Commission (CIC) ruled that India’s political parties operate as “public entities,” rendering them subject to the provisions of the Right to Information Act. In response, the six national parties thumbed their nose at the CIC, disregarding the apex body’s verdict. The CIC, lacking an enforcement mechanism to bring the parties to heel, referred the matter to the Supreme Court, where it languishes till today. According to an Association for Democratic Reforms (ADR) analysis, two-thirds of national parties’ declared income in 2018-2019 emanated from “unknown sources”. Interestingly, the ruling party’s unknown income was 1.5 times greater that of the other five national parties combined.

Of course, these figures represent what parties determine acceptable to disclose. Despite the heated rhetoric about the need for the government or Opposition interests to submit to audits by the Comptroller and Auditor General (CAG), political parties face no third-party scrutiny. Yes, one can readily find parties’ income tax returns online. But nowhere in this raft of documents will you find either the signature of a credible, independent auditor or a tight correlation with the reality of party finances.

But it is in the realm of foreign contributions where the hypocrisy of political elites is the most apparent. In 2014, the Delhi high court found both the BJP and the Congress guilty of accepting donations from several foreign corporations. In 2016, these two rivals set aside their bitter differences to bail one another out by amending the 2010 Foreign Contribution Regulation Act (FCRA) to retroactively redefine what a “foreign source” was under the law. Rather than face the consequences, the two parties conspired to simply reclassify previously designated foreign companies as “Indian” with the stroke of a pen. The cynicism behind this measure was matched only by the legislative clumsiness on display; because several of the foreign donations pre-dated 2010, Parliament had to pass a second retrospective bill in 2018 —this one amending the original 1976 FCRA law.

Having tackled the FCRA issue, the present government ushered in a trifecta of legislative changes — the introduction of anonymous electoral bonds, the elimination of the cap on corporate giving, and the scrapping of a provision that firms detail their political contributions on their annual profit and loss statements.

Collectively, these alterations have not simply opened the door to possible foreign funding, they have flung it open and laid down a welcome mat. We now know from Nitin Sethi’s investigative reporting that the Reserve Bank of India (RBI) and the Election Commission of India (ECI) both expressed grave concerns about electoral bonds. When first presented with details of the scheme, RBI told the finance ministry that the new funding instrument was vulnerable to money laundering, opacity, and potential abuse. ECI, too, lamented that the new bonds would open the door to foreign influence via dodgy money routed through shell companies. These concerns fell on deaf ears.

But, perhaps, the most damning reality is that no politician in India is losing sleep over this sordid state of affairs. Politicians are counting on political tribalism to dominate common sense, sending citizens scurrying to their respective social media corners. They are counting on the populace to imbibe the headlines, glossing over the fine print. And, most importantly, they are counting on voters to ignore concerns about probity when they show up at the ballot box. And, in the end, who can blame them? As evident in voting patterns, when it comes to integrity in Indian politics, politicians have the last laugh.