India’s Congress party accuses government of freezing accounts before polls

The main opposition party says Modi government has ‘crippled’ it before the upcoming election by freezing bank accounts in an income tax case.

The Congress party, India’s main opposition political group, has accused Prime Minister Narendra Modi’s government of stifling democracy and “crippling” the party by freezing its bank accounts in a tax dispute ahead of the general election.

India will hold a six-week election starting next month, with the Congress-led alliance pitted against Modi’s heavily funded Bharatiya Janata Party (BJP).

Former Congress chief Rahul Gandhi on Thursday told reporters in New Delhi the party is unable to campaign properly with its accounts frozen by the income tax department.

“Our entire financial identity has been erased,” said Gandhi, 53, the scion of the family that dominated Indian politics for decades after independence.

“We have no money to campaign, we cannot support our candidates. Our ability to fight elections has been damaged.”

A portion of the Congress’s bank accounts were frozen last month pending a tax case that dates back to 2018-19. Earlier this month, a tax tribunal dismissed its appeal to pause the recovery of 1.35bn rupees ($16.32m) in income tax from its bank accounts.

Congress treasurer Ajay Maken said in a statement that tax authorities imposed a 2.1bn rupee ($25m) lien on February 13, “virtually sealed” its bank accounts, and then confiscated 1.1bn rupees ($14m).

The Congress claims the tax department’s sanctions are politically motivated, to hobble it from mounting a challenge to Modi’s BJP.

“Last week, we received another notice from the tax authorities that dates back to our filings from 1995-96,” Gandhi said. “This is a criminal action on the Congress party done by the prime minister and the home minister. The idea that India is a democracy is a lie. There is no democracy in India today.”

Earlier on Thursday, his mother and former Congress chief Sonia Gandhi also made a rare public appearance, saying the tax penalty was “part of the systemic efforts to cripple” the party.

The BJP rejected the allegations, saying the Congress’s bank accounts were partially frozen because it had failed to file an income tax return for cash donations it received in 2017-18 and had therefore lost the tax exemption available to political parties.

BJP president Jagat Prakash Nadda said the Congress was making the accusations against Indian democracy and institutions because it feared an “historic defeat” in the election.

India’s Supreme Court is scheduled to take up the Congress party’s complaint early next month after it was rejected by tax appeal authorities, BJP spokesman Ravi Shankar Prasad told reporters.

According to the latest official financial disclosures to the Election Commission of India, the BJP’s funds are nearly 10 times that of Congress. The gulf dramatically widened after Modi’s government introduced contentious electoral bonds in 2017, allowing unlimited anonymous donations.

Last month, the Supreme Court outlawed the scheme as unconstitutional and asked for donor and receiver details to be made public. Released details showed the BJP was by far the single largest beneficiary, with just under half of all donations, totalling about $730m.

Voting in India, the world’s largest democracy, will stretch over seven phases from April 19 to June 1, with different states voting at different times. Results are to be announced on June 4.

Congress president Mallikarjun Kharge said the lack of funds had made the party “helpless” ahead of the election.

“There is no level playing field,” he said.