New Delhi, May 19 (IANS) The CPI-M on Thursday denounced the government for taking “the dangerous step” of allowing foreign companies to fund political parties in India.
A CPI-M statement said that under the changed law, all multinationals operating in India like IBM, Samsung, General Motors and so on can finance political parties.
This would be in addition to the donations by Indian corporates which are legal, the Communist Party of India-Marxist said.
“By making such a blanket change, all foreign enterprises and multinational companies will be considered to be Indian and free to donate funds to recognized political parties.
“This will have grave repercussions for the democratic system and impact on the political party system itself.
“It will lead to direct intervention by MNCs in the political system and subvert the integrity of parliamentary democracy.
“By such a change, donations to NGOs by foreign companies will also become legal.
“It will thus knock the bottom of the FCRA which was meant to regulate the flow of foreign funds to various public activities with the aim of protecting the integrity and sovereignty of the country,” it said.
The CPI-M described the legalizing of foreign company donations as “an anti-national, anti-democratic step.
“The Modi government has unleashed a pernicious foreign influence to pollute the political parties and subvert democracy.”
The CPI-M said that till now, as per the Foreign Contribution (Regulation) Act (FCRA), political parties were prohibited from receiving foreign money. This included foreign companies and their subsidiaries in India.
So far, a company operating in India was considered foreign if 51 per cent or more of its share capital was from a foreign source.
“It is this clause in the FCRA which has been amended in the Finance Bill to state that even if the foreign investment is more than 50 per cent, as long as the foreign capital is within the limits specified for foreign investments under the Foreign Exchange Management Act or the rules and regulations, then that company will not be deemed to be foreign.
“What this means is that if foreign capital investment of 74 per cent is allowed in a sector, like the telecom sector, then a company with majority foreign shareholding will not be treated as a foreign company.
“Thus, Vodafone, a telecom company, will be treated as an Indian company,” it said.