Why it is in news?

• The Supreme Court  asked the Centre and the Election Commission to respond to a petition challenging the various amendments made through Finance Act 2017 and Finance Act 2016 in various statutes, saying these changes have opened the floodgates for unlimited corporate and foreign donations to political parties.

 What does the petition say?

• Plea is Seeking to strike down the amendments made to the Companies Act, the Income Tax Act, the Representation of the People Act, the Reserve Bank of India Act and the Foreign Contribution Regulation Act.
• Petitioner said the amendments, introduced as money Bills, legitimise electoral corruption, while ensuring complete non-transparency in political funding.

Finance Act of 2017

• Introduced the use of electoral bonds, which is exempt from disclosure under the Representation of the People Act, 1951, opening doors to unchecked, unknown funding to political parties.

Finance Act, 2016

• Amended the Foreign Contribution Regulation Act (FCRA), 2010, to allow foreign companies with subsidiaries in India to fund political parties in India, effectively, exposing the Indian politics and democracy to international lobbyists who may want to further their agenda. 

What is finance bill?

• Finance Bill is a secret bill introduced every year in Lok Sabha (Lower chamber of the Parliament) immediately after the presentation of the Union Budget, to give effect to the financial proposals of the Government of India for the immediately following financial year.
• The Finance Bill is presented at the time of presentation of the Annual Financial Statement before Parliament, in fulfillment of the requirement of Article 110 (1)(a) of the Constitution, detailing the imposition, abolition, remission, alteration or regulation of taxes proposed in the Budget.
• It is through the Finance Act that amendments are made to the various Acts like Income Tax Act 1961, Customs Act 196.