Law forbids foreign companies from making political donations

The two major political parties the Congress and the BJP have filed affidavits claiming that a political donation is allowed if the majority shareholding in the foreign company registered abroad is of an Indian. The affidavits have been filed before the Delhi high court in response to a PIL filed by Association for Democratic Reforms (ADR) and retired civil servant EAS Sarma. The PIL alleged that Congress and BJP have been receiving tens of crores of donations from foreign firms through their Indian subsidiaries.

Indian law prohibits a “foreign company” from making any donation to political parties even if it has an Indian subsidiary.

What is the PIL about?

The PIL alleged that Congress and BJP have been receiving tens of crores of donations from foreign firms through their Indian subsidiaries. The petition cited one example against the government and the two parties is of UK-registered Vedanta Resources, in which Indian citizen Anil Agarwal holds at least 50% of the paid-up capital. Referring to the donations admittedly made by Vedanta through three of its Indian subsidiaries, Sterlite, Sesa Goa and MALCO, the petitioners alleged that the government had not taken any action against Congress and BJP because, among other reasons, finance minister P Chidambaram had been on the board of directors of the parent company. The PIL has sought a court-monitored investigation as foreign funding of political parties is forbidden by at least two laws.


Which are the main laws prohibiting foreign funding of political parties?

  • Section 29B of the Representation of the People Act: It stipulates that no political party be allowed to accept any donation from “any foreign source”.
  • Section 3(1)(e) of the Foreign Contribution Regulation Act (FCRA): It prohibits any financial contribution from any foreign company to a political party.
  • Section 2(1)(g)(ii) of FCRA:  It clarifies that a foreign company includes its Indian subsidiaries.
Response from Government and Political parties

The government and the two named political parties contended that contributions from the subsidiaries of a foreign company such as Vedanta were allowed by FCRA. Their defense is that one of definitions of a foreign company, spelt out in Section 2(1)(g)(i) of FCRA, is an entity “within the meaning of Section 591 of the Companies Act”. The implication of this reference, in their interpretation, is that a donation made by any foreign company through its Indian subsidiary will not be regarded as a foreign contribution so long as an Indian holds a majority stake in the parent company.


The petitioners challenged this interpretation by the two political parties and the government, which is controlled by one of them. The rejoinder pointed out that the purpose of Section 591 was merely to ensure that Indian subsidiaries of a foreign firm were accountable to Indian authorities. As per the petitioners, the particular clause in the Companies Act, as cited by the government in its defence, could by no means be cited to skirt the expressed prohibition on foreign contribution to political parties in the RP Act and FCRA and in any event, Section 2(1)(g) gives four different definitions of a foreign company and therefore one definition cannot be construed to neutralize another.

ISRO conducts successful test run of Mars Orbiter Mission

The Indian Space Research Organization (ISRO) performed a glitch free rehearsal of India’s first mission to the Red Planet designated the Mars Orbiter Mission (MOM) at Sriharikota centre. The MOM is scheduled for launch at 2.38pm on November 5, 2013.

As per ISRO, the dry run simulated the entire command sequence of the countdown. It demonstrated the mission readiness. Except for fuel filling all the activities 8-10 hours prior to the lift-off of the Polar Satellite Launch Vehicle-XL were simulated without a snag. The trial’s most significant aspect was the retraction of the mobile service tower and bringing it back which was performed impeccably.

If everything goes well, the final 56.5-half countdown will start at 6am on November 3, 2013. To involve the public, a countdown clock has been included on the MOM’s Facebook page.

US space agency NASA also plans to launch Mars Atmosphere and Volatile Evolution (MAVEN) mission which is slated for launch on November 18, 2013 and both MOM and MAVEN are expected to arrive at the Red Planet at the same time in September 2014.

About India’s Mars Orbiter Mission (MOM) ‘Mangalyan’:
  • The Mars Orbiter Mission (MOM) has been named ‘Mangalyan
  • To be launched onboard PSLV C25 on November 5, 2013 at 14:36 hours from the first launch pad of Satish Dhawan Space Centre at Sriharikota.
  • India’s first interplanetary mission to planet Mars with an orbiter craft designed to orbit Mars in an elliptical orbit.
  • It will reach Martian transfer trajectory in September 2014. Subsequently, it is planned to enter into a 372 km by 80000 km elliptical orbit around Mars.
Objectives of India’s Mars Orbiter Mission (MOM) ‘Mangalyan’:
  • The main objectives of the Mars mission are to showcase India’s technological prowess to send a satellite to orbit around Mars and conduct important experiments such as looking for signs of life, take pictures of the red planet and study Martian environment.
  • To develop the technologies required for design, planning, management and operations of an interplanetary mission.
  • Design and realisation of a Mars orbiter with a capability to survive and perform Earth bound manoeuvres, cruise phase of 300 days, Mars orbit insertion or capture.
  • Deep space communication, navigation, mission planning and management.
  • Incorporate autonomous features to handle contingency situations.
  • Exploration of Mars surface features, morphology, mineralogy and Martian atmosphere by indigenous scientific instruments.
Key Payloads on PSLV C25:
  • Lyman Alpha Photometer (LAP)
  • Methane Sensor for Mars (MSM)
  • Mars Exospheric Neutral Composition Analyser (MENCA)
  • Mars Colour Camera (MCC)
  • Thermal Infrared Imaging Spectrometre (TIS)