India's opposition Congress accuses government of freezing bank accounts ahead of election

'This has been orchestrated to cripple us in the elections,' says Congress leader Rahul Gandhi

Indian National Congress leader Rahul Gandhi said there was 'no democracy in India today' at a press conference at party headquarters in New Delhi. AFP

India’s main opposition party, the Indian National Congress, has accused the government of financially “crippling” it before national elections by freezing its bank accounts over an alleged tax violation.

Congress claimed in February that the federal income tax department had frozen its bank accounts and demanded 2.1 billion rupees ($25 million).

Congress leaders, including Rahul Gandhi, party president Mallikarjun Kharge and former president Sonia Gandhi, held a press conference in New Delhi on Thursday.

They accused Prime Minister Narendra Modi's government of “criminal” intent and “crippling” the largest opposition party ahead of the key vote next month.

“All our bank accounts have been frozen. We can do no campaign, [nor] support our workers, cannot support our candidates,” said Mr Gandhi, who is Mr Modi's main challenger for Prime Minister.

“Leaders cannot fly or take railways, and this has been done literally two months before the election campaign.”

“This has been orchestrated to cripple us in the elections … This is a criminal action on the Congress party and the criminal action done by the Prime Minister and Home Minister [Amit Shah],” he said, adding “our ability to fight elections has been damaged”.

Mr Gandhi said there was “no democracy in India today”.

“The idea that India is a democracy is a lie,” he said.

India will undertake seven-phase elections starting on April 19 to elect a new government, with results expected on June 4.

Political parties in India spend billions of rupees on campaigning, including media and online promotions and massive public rallies.

Large corporations and individual supporters donate billions of rupees every year to political parties to contest elections.

Parties raised nearly 165 billion rupees between 2018 and 2024 through the now-scrapped electoral bonds, according to data from the Election Commission of India.

Congress received nearly 20 billion rupees from the total donations, while Mr Modi's Bharatiya Janata Party (BJP) took the majority of the funds, pocketing 82 billion rupees.

The opposition party said the tax dispute relates to 2018-19, when India held general elections in which the BJP won with a thumping majority.

The bank accounts were first frozen in February but temporarily unfrozen days later, following an appeal by the party to a tax tribunal that asked it to keep 1.1 billion rupees in the account as a surety until the “tax evasion” matter is resolved.

Congress had appealed before the Income Tax Appellate Tribunal, a quasi-judicial body, to take legal action in response to the freeze but the tribunal dismissed its application.

The party approached the Delhi High Court this month challenging the tribunal’s order, but the court refused to interfere and declined to stay a notice issued by the income tax department.

Rahul Gandhi’s mother, Sonia Gandhi, who led the party for two decades and helped it win elections in 2004 and 2009, alleged the action was a “determined assault” on Congress, which is known as the grand old party and has produced three prime ministers since independence from Britain in 1947.

“This issue affects not just the Indian National Congress but impacts our democracy most fundamentally. Systematic effort is under way to cripple Indian National Congress financially,” Ms Gandhi said.

“The electoral bonds have benefited the BJP massively. On the other hand, the principal opposition party is under a determined assault. This we all believe is unprecedented and undemocratic,” she said speaking about the anonymous bonds scheme.

India’s Supreme Court had last month scrapped the electoral bonds system that allowed donors, including corporations, to buy electoral bonds from the State Bank of India to fund political parties without their names being made public.

The Election Commission of India is expected to release the unique identification numbers of the bonds later this week which will help connect donors with the political parties after the state bank skipped the information while making public the names of the donors and political parties.