India's opposition Congress Party says bank accounts have been frozen

Income Tax Department has demanded $25 million, says party treasurer

Indian National Congress accuses Prime Minister Narendra Modi’s government of turning the country into an autocracy. EPA

India’s main opposition party, the Indian National Congress, on Friday said that its bank accounts had been frozen by authorities before national elections due to take place before May this year.

Ajay Maken, the party's spokesman and treasurer, claimed at a press conference that the federal income tax department has demanded 2.1 billion rupees ($25 million) and frozen its bank accounts, including that of its youth wing.

The tax dispute relates to 2018-19. The account was temporarily unfrozen on Friday morning following an appeal by the party, which stands accused of breaching India's income tax law.

Without disclosing the total amount in the accounts, Mr Maken said the tribunal had unfrozen them on the condition that they maintain a balance of 1.1 billion rupees.

He alleged that the move was politically motivated as the country is due to have elections to choose a new government by May and said it was a “disturbing blow to the democratic process”.

“Democracy does not exist any more in our country. It is just a one-party rule, one-party democracy in our country,” Mr Maken said.

“When the principal opposition party’s accounts have been frozen just two weeks before the announcement of the national elections, do you think democracy is alive in our country?”

Indian elections have been described as the costliest in the world, with parties and politicians indulging in extravagant public rallies, events, social media campaigns and widespread advertising.

Indian National Congress accuses Prime Minister Narendra Modi’s government of turning the world’s largest democracy into an autocracy.

India's Congress party leader Rahul Gandhi addresses supporters during its Bharat Jodo Yatra (Unite India March) in Siliguri, in West Bengal, in January. AFP

Mr Modi’s government has been accused of using federal institutions such as the Income Tax Department and Enforcement Directorate – the federal financial police – to target opposition parties.

The move came a day after India’s Supreme Court scrapped the electoral bonds system that allowed political parties to receive funds anonymously.

Mr Modi's Bharatiya Janata Party has been the biggest beneficiary of the scheme, raking in billions of rupees since the law was introduced.

It received 52.7 billion rupees from a total of 92 billion rupees, or 57 per cent of the value of electoral bonds sold from 2018 to 2022, according to Election Commission data.

The Congress Party received 9.6 billion rupees, or 10 per cent, in the same period.

Mr Maken said that the party had received money through crowdfunding, and the freezing of its bank accounts would impact the party’s political activities.

“Money with the Congress party is not that of the corporations, not that of the bonds … it is the money which has come to us from the crowdfunding of the workers … everything will be impacted, all political activities will be impacted,” he said.

Congress has appealed before the income tax appellate tribunal, a quasi-judicial body, to take legal action in response to the freeze.

Members of the party's youth wing hit the streets in capital Delhi on Friday and protested against the move. They burnt effigies of Mr Modi and shouted slogans against his government. Many of them were later detained by police.