Rajiv Gandhi Foundation Receiving Chinese Funding On Multiple Occasions: The Controversy Explained

Amidst the India-China border stand-off in Ladakh, Bharatiya Janata Party (BJP) made stinging allegations that the Congress party had subverted national interest in lieu of funds from China for the Rajiv Gandhi Foundation (RGF) in 2005-06 when the Congress-led UPA-I was in power.

RGF is a charitable organisation with Congress president Sonia Gandhi as its chairperson. Former prime minister Manmohan Singh, party leaders Rahul Gandhi, P Chidambaram and Priyanka Gandhi serve as its board members.

BJP national president J P Nadda said the amount received was a hefty sum of $300,000.

On Thursday, BJP leader Amit Malviya, in a series of tweets, alleged the RGF had taken funding not only from the Chinese embassy in Delhi, but also from the Chinese government.

Malviya further accused the Congress party of subverting India’s economic interests in lieu of the funding.

“Did donations to RGF deliver a debilitating blow to India's economy? During UPA1, India’s trade deficit with China increased more than 17x, and under UPA2 by 88 per cent. Under the UPA, overall trade deficit with China increased 33x, i.e from $1.1 Billion in 2003-04 to $36.2 Billion in 2013-14,” he said.

The annual statements of the RGF show that it received donations not once, but thrice between 2005 and 2008.

In this time, the RGF launched seminars and projects on India and China relations. The most striking is a study on the feasibility of a Free Trade Agreement between India and China by Mohammad Saqib.

The reports of the RGF, while acknowledging that the China would be "the greater beneficiary” because of the “efficiency of its economy”, they continuously advocate a comprehensive free trade agreement:

The study concluded that ‘there are always losers and gainers in the regional and free trade agreements. India and China can balance the gains and losses through an FTA. Therefore both governments should decide to enter into FTA negotiations. The proposed FTA between India and China will be feasible, desirable and mutually beneficial. An FTA between India and China should also be comprehensive, with a free flow of goods, services, investment and capital.’

..an FTA would help bilateral economic relations and that the free flow of goods, services, investment and capital would, in fact, benefit India’s trade sector more than China’s.

India recorded a trade deficit of $48.5 billion with China in FY20. It is more than 60 per cent of the size of India’s total goods trade of $87 billion with China.

For February 2020, the trade deficit with China stood at $3.3 billion while India’s trade deficit was $9.8 billion, that is, China accounted for about 34 per cent of the total.

Large trade deficit is continuously an issue of contention between the two countries. This has caused many questions to be raised against the RGF’s strong advocacy of the FTA.

“Questions for the Congress - these donations to RGF, if you can still call them that, have any connection with the MoU signed between the Congress and CPC in 2008? What other things is the Congress party hiding from India on its relations with the CCP? Full disclosure needed,” wrote Malviya.

The 2008 MoU was reportedly signed by Congress leader Rahul Gandhi on behalf of the Congress party with the Chinese Communist Party. It was signed at Beijing in the presence of Sonia Gandhi. The facts and details of the agreement were not disclosed to the public.

On Wednesday (24 June), a plea was filed in the Supreme Court demanding making the details of the agreement public, and a court-monitored probe into the matter. “The Congress party brought the Right to Information Act during its rule, yet it failed to be transparent in this matter which is of national importance”, the petition said.

The petitioners submitted to the court that after the MoU was signed at least 600 incursions happened from Chinese side into Indian territory between 2008 and 2013.

The law minister Ravi Shankar Prasad wrote on Twitter, “There is a pattern as to why Congress party does not condemn China because 10 years rule of Manmohan Singh govt is littered with various evidence as to how congress party tried to support China and make it earn tonnes of money by permitting the increase of trade deficit 33 times.”

“The RGF much like the Gandhis is a law unto itself”

Dr Anand Ranganathan said that the RGF appears to be like an offshore shell company.

“In order to get deep into this issue, we have to look at the antecedents. It is a kennel for all lapdogs and their owners who move in and out of government as and when Congress moves out of power.”

Ranganathan questioned how at a time of Indo-China conflict the RGF could take monetary donations from a Chinese official.

“This is exactly what the RGF did when it accepted money from the Chinese ambassador Sun Yuxi, when he said and I quote, the whole of what you call Arunachal Pradesh is Chinese territory and we are claiming all of it.”

Ranganathan was refering to the Chinese Ambassador to India to India Sun Yuxi donating Rs 10 lakhs to the RGF in 2006.

“The RGF is a law unto itself, much like the Gandhis,” said Ranganathan.

“Did you know that it was sanctioned hundred crores by Manmohan Singh in his very first budget as a finance minister? This was thankfully cancelled afterwards. Then in 1995, the Congress ministry granted usage of Jawahar Bhavan, a building on prime Delhi land worth millions for free to RGF.”

Ranganathan said that The Statesman reported in 1995 that Sonia Gandhi had aquired through RGF a building worth hundred crores. “Meanwhile, RGF refused to give CAG access to its audits despite routinely obtaining grants from government bodies”.

“The RGF disallowed the SC ST reservations. Remember the first chief information commissioner (CIC) under whom comes the RTI, Mr Habibullah? He had also been the secretary of the RGF. In 2010, CIC ruled that the RGF doesn't come under the RTI!"

“Remember Pulok Chatterjee, the man who used to fetch PMO files to be vetted by Sonia Gandhi, as disclosed by Sanjaya Baru in his book; he had been a director of the RGF”

“Hire and fire at will is the RGF norm. When Bibek Debroy hailed Gujarat as number one in economic freedom in 2004, he was sacked from the RGF-funded think tank RGICS because Sonia Gandhi demanded that all the reports be screened by her first.”

A controversy also erupted over the transfer of funds from Prime Minister’s National Relief Fund (PMNRF), whose mandate is to use public contributions for disaster relief, was found as one of the donors to the RGF.

A Senior Assistant Editor of Economic Times reported that the annual statements of the RGF which are public show PMNRF as one of the donors in 2006-07.

The annual statements of the RGF show that the donations were made in the year 2005-2006 and again in 2007-2008.