This brings us to the larger question. What is the purpose of this law? The Unlawful Activities (Prevention) Act 1967 and the Prevention of Money Laundering Act 2002 address issues such as terrorist financing. Governance and transparency requirements are addressed through laws governing societies, trusts, companies, etc. Reporting of income can be ensured through the Income Tax Act. The prohibition of receiving foreign contribution by various groups such as legislators, bureaucrats, etc, could be enforced through service rules and codes of conduct rules. And if there are loopholes in any of these laws, they can be plugged by amending the respective rules. And we could just use one clause from the proposed law: Clause 54(1) that reads, “The Foreign Contribution (Regulation) Act, 1976 is hereby repealed.” (Full disclosure: the writer works with an institution that receives foreign contribution).

The writer works with PRS Legislative Research at the Centre for Policy Research, New Delhi