Indian National Congress Faces Bank Account Freeze Ahead of Elections: Democracy Under Threat, Alleges Opposition

India’s principal opposition party, the Indian National Congress, declared on Friday that its bank accounts had been subjected to freezing by federal tax authorities, just weeks ahead of an anticipated nationwide election.

The move sparked widespread condemnation from the Congress and its allies, who accused the government of undermining democracy. Congress Treasurer Ajay Maken revealed in a press briefing that the freeze occurred subsequent to an examination of the party’s income tax filings for the 2018-19 fiscal year. Maken disclosed that the Income Tax Department had issued a payment demand amounting to 2.1 billion rupees ($25.3 million) concerning the ongoing investigation.

Maken emphasized the broader implications, stating, “The Congress party’s bank accounts haven’t been frozen. It’s the democracy that has been frozen.” He questioned whether the nation was heading towards a single-party system.

Later in the day, an income tax tribunal provisionally reinstated access to the party’s accounts pending a hearing scheduled for Wednesday, as confirmed by lawyer and Congress lawmaker Vivek Tankha.

Efforts to obtain comments from India’s Income Tax Department, Finance Ministry, and various leaders within the Congress party were underway, as reported by CNN.

Protests erupted in Delhi’s prominent Jantar Mantar area, with Congress supporters gathering to denounce the action. Party chief Mallikarjun Kharge urged the judiciary to intervene and “safeguard the multi-party system in this country and preserve India’s Democracy.”

Allegations of democratic suppression in India have been recurrent, with the latest incident on Friday adding to a series of investigations targeting notable adversaries of Prime Minister Narendra Modi’s ruling Bharatiya Janata Party (BJP).

Former Congress luminary Rahul Gandhi, scion of a political lineage that produced three prime ministers, faced disqualification as a lawmaker last year and was handed a two-year jail sentence for defamation in a verdict his supporters allege was politically motivated. Gandhi’s status as a lawmaker was subsequently reinstated following intervention by India’s Supreme Court.

In a staunch declaration, Gandhi asserted his party’s determination to defend India’s democracy. “We have never bowed down before dictatorship, nor will we ever bow down,” he conveyed on X, formerly known as Twitter.

The Congress party, once a formidable force in Indian politics, has witnessed a decline in electoral fortunes since Modi assumed power a decade ago, pledging economic advancement and societal prosperity.

Attempting to forge an opposition coalition to challenge Modi’s BJP in the upcoming election, the Congress Party faces internal strains as backing for the BJP swells, just weeks before an estimated 900 million Indians are slated to cast their votes.

Termed the world’s largest democratic exercise, the Indian election assumes critical significance for the nation, as it garners global attention with Modi positioning himself as a statesman solidifying India as a contemporary superpower.

However, domestic tensions persist, particularly among minorities who feel marginalized under the BJP’s majoritarian Hindu nationalist policies.

In the latest barometer of voter sentiment, the Congress Party suffered setbacks in three out of four regional contests in key state elections in December, bolstering Modi and the BJP.

Karnataka Congress Leader Warns of Southern Secession Over Alleged Central Fund Diversion

A Karnataka Congress leader, immediately following the unveiling of the interim budget today, accused the Central government of diverting developmental funds from south India to bolster the northern regions. DK Suresh Kumar, a Congress MP, warned that if this issue remains unaddressed, it might necessitate the southern states to seek autonomy, stating, “If we don’t condemn this in the upcoming days, we will have to place a demand for a separate country as a result of the situation the Hindi-speaking region has forced on us.”

The Bharatiya Janata Party (BJP) responded by accusing the Congress of promoting divisive sentiments. Chaluvadi Narayanaswamy of the BJP criticized the Congress’s stance, suggesting that instead of fostering unity (“Bharat Jodo”), they seem to advocate for division (“Bharat Todo”). He condemned the Congress mindset, drawing parallels to the partition of India in 1947, and questioned the party’s commitment to upholding the nation’s unity despite Rahul Gandhi’s calls for integration.

This discontent echoes Mamata Banerjee’s grievances in West Bengal, where the Congress, newly in power in Karnataka, aligns itself with her narrative of inadequate central funding. DK Suresh Kumar emphasized the perceived injustice faced by southern states, asserting, “We want to receive our money. Whether it is the GST, Custom or Direct taxes, we want to receive our rightful share… our share of money for development is getting distributed to north India.”

Recently, the Karnataka Congress administration released a white paper highlighting the disparity between the state’s contributions to the national economy and the funds it receives from the Centre. M. Lakshmana, a spokesperson for the state Congress, cited figures indicating that Karnataka’s tax contributions far exceed the returns it receives. Despite contributing significantly to corporate and other taxes, as well as GST, Karnataka is reportedly receiving disproportionately low allocations from the Centre.

The grievances are not limited to Karnataka alone. Similar concerns have been raised by Kerala and the DMK-led government in Tamil Nadu. This discontent culminated in Karnataka’s Congress government contemplating the formation of a coalition to challenge what they perceive as biased tax devolution by the Central government. Officials noted a decrease in Karnataka’s share of taxes from 4.71% to 3.64% under the current Finance Commission, further exacerbating the perceived imbalance in resource allocation.

House Approves Short-Term Funding Measure, Averting Government Shutdown

In a decisive move, the House of Representatives endorsed a short-term spending bill on Thursday to maintain government operations until March, successfully avoiding a partial shutdown just one day before the looming deadline. The Senate had previously greenlit the two-step continuing resolution (CR), with a vote of 314-108, allowing lawmakers more time until March 1 and March 8 to finalize the formal appropriations process. This marks the third short-term spending bill ratified by Congress in fiscal 2024.

The successful passage of the stopgap represents a notable achievement for Speaker Mike Johnson (R-La.), who navigated negotiations with congressional leaders to prevent a shutdown. Johnson managed to garner enough support within his conference to secure approval, albeit relying heavily on Democratic backing, as conservatives voiced concerns about the absence of spending cuts and insufficient border security policies. Notably, only two Democrats, Representatives Jake Auchincloss (Mass.) and Mike Quigley (Ill.), dissented against the measure.

Johnson employed a fast-track approach by bringing the legislation to the floor under the suspension of rules, bypassing the need for an initial rule approval. However, this approach necessitated two-thirds support for passage, demanding a bipartisan effort. Former Speaker Kevin McCarthy (R-Calif.) faced consequences for a similar decision in October.

Looking ahead, Speaker Johnson faces challenges, particularly in his commitment to include conservative policy riders in the 12 annual appropriations bills. Achieving this goal seems formidable given the Democratic majority in the Senate and the White House. Despite his optimism, Johnson, who has held the position for only 85 days, also grapples with discontent from conservative Republicans dissatisfied with his approach to government funding and the issue of additional aid to Ukraine.

While Johnson rejected calls from conservatives to backtrack on the bipartisan top-line spending deal and dismissed the idea of a long-term continuing resolution, there are murmurs of potential challenges to his Speakership. Representatives Chip Roy (R-Texas) and Marjorie Taylor Greene (R-Ga.) have hinted at forcing a motion to vacate, the same mechanism used to oust McCarthy, although the threat to Johnson’s leadership seems limited.

The legislative journey on Thursday was not without last-minute drama. The House Republican leadership advanced the vote on the two-step stopgap bill from Friday morning to Thursday afternoon, with the Senate having already approved it. Notably, Representatives Bob Good (R-Va.) and Andy Harris (R-Md.) proposed adding an amendment vote on border and migration policy, a suggestion rejected by Speaker Johnson, further straining relations with conservatives.

Despite some opposition from conservatives, the two-step framework was embraced by a segment of the right-flank, offering a strategic alternative to a year-end omnibus bill. The measure extends funding for four of the 12 annual spending bills until March 1, preventing a lapse for critical departments. Additionally, it postpones the Feb. 2 deadline for other government agencies to March 8, allowing more time for negotiations.

While spending cardinals emphasize the necessity of extra time to craft all 12 funding bills, concerns about the pace of negotiations persist. Some worry about the potential need for another stopgap bill in March, which would mark the fourth in the current session, underscoring deep partisan divides over spending. Capitol Hill is also apprehensive about the looming April deadline for automatic spending cuts if Congress fails to conclude its work promptly.

Senator Jon Tester (D-Mont.), chair of the subcommittee overseeing Department of Defense funding, expressed concern over the lack of urgency, while acknowledging ongoing efforts by top negotiators to finalize allocations for the 12 spending measures. As lawmakers tread cautiously in the coming weeks, the delicate balance between bipartisan cooperation and ideological discord will play a crucial role in determining the fate of future funding measures.