FCRA and Vedanta Donation Case

What is the issue?

  • Congress and BJP received foreign funds from two subsidiaries of Vedanta, a UK based company from 2004 to 2012
  • The Association for Democratic Rights (ADR) filed a PIL plea against the two parties for violating the FCRA. The Delhi High Court had held that the donations were illegal in 2014.
  • Government has not taken any action against the two parties after the order
  • Delhi HC has asked why no action has been taken
  • Home Ministry will seek the Attorney-General’s opinion to amend the repealed Foreign Contribution Regulation Act (FCRA) 1976, which barred foreign donations to political parties

Relation with FCRA amendment:

  • In 2017, the NDA government had amended the FCRA through the Finance Bill route, which allowed foreign-origin companies to fund NGOs here and also cleared the way for donations to political parties by changing the definition of “foreign companies.”
  • Although the amendment was done retrospectively it only made valid the foreign donations received after 2010, the year when the 1976 Act was amended
  • The retrospective amendment did not apply to donations prior to 2010
  • ADR filed a contempt petition for donations received prior to 2010

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