Political funding PIL: Supreme Court serves notice to govt on Finance Act amendments1 min read . Updated: 04 Oct 2017, 01:12 AM IST
A PIL has challenged amendments to Finance Act 2017 and Finance Act 2016, both of which were passed as money bills, allegedly leading to illicit and foreign funding of political parties
New Delhi: The Supreme Court on Tuesday issued a notice to the centre on a plea challenging amendments to various statutes introduced through The Finance Act, 2017, and The Finance Act, 2016, both of which were passed as money bills, allegedly leading to illicit and foreign funding of political parties.
The statutes amended include the Income Tax Act, 1961, Representation of People’s Act, 1951, Reserve Bank of India Act, 1934, Foreign Contribution (Regulation) Act, 2010 (FCRA) and Companies Act, 2013.
The public interest litigation (PIL), filed by Association of Democratic Reforms (ADR) and NGO Common Cause, was listed before a bench headed by Chief Justice Dipak Misra who sought a response from the centre and the Election Commission over the issue.
It has been alleged that the amendments introduced through Finance Act, 2017 were passed as a money bill and were unconstitutional and in violation of the doctrine of separation of powers.
The wide-ranging amendments in the statutes were brought in as a money bill, bypassing the Rajya Sabha and were passed with very little or no debate in the Parliament.
The amendments are also “patently arbitrary, capricious and discriminatory" as they attempt to keep from the citizens crucial information regarding electoral funding, it was added.
According to ADR, an organization that has been at the forefront of electoral reforms in the country, the amendments have opened the floodgates to unlimited corporate donations to political parties and anonymous financing by Indian and foreign companies which can have serious repercussions on the transparency of political funding. By removing the cap on donations by companies, it has legalised anonymous donations.
The petition claimed that legitimizing electoral corruption would adversely affect electoral transparency and make the nexus between politics and corporate houses more opaque and subject to misuse by corporate houses and lobby groups.
The Finance Act, 2017 was introduced in the Lok Sabha on 1 February as a money bill. It introduced a system of electoral bonds to be issued by any scheduled bank for the purpose of electoral funding.
It also did away with the previous limit of 7.5% of the company’s average three-year net profit for political donation as a result of which unlimited political donations could be made by corporates without having to disclose the name of political parties they were funding.