BRP Bhaskar
The Bharatiya Janata Party, which now heads the government at the Centre and in many states, has been for long an advocate of state funding of election expenses. Since the idea has not found favour with other political parties, it is not in a position to initiate any measures in this regard.
The enormous cost which the contesting parties and candidates have to bear is one of the factors responsible for rampant political corruption. There is no limit on the amount a party can raise and spend. However, there is a ceiling of Rs 7 million on the expenses of a Lok Sabha candidate and of Rs 2.8 million on those of an Assembly candidate in all but nine very small states where the limits are lower.
In the big states a parliamentary constituency may have more than two million voters. Many candidates are believed to exceed the set expenditure limit and falsify the statement of accounts given to the Election Commission to hide the breach of the law.
The political parties can accept donations from individuals as well as private companies. Until now they were required to file statements every financial year giving details of contributions of more than Rs 20,000 which they have received from individuals and companies. To qualify for tax exemption they had to provide names and addresses of those who donated more than Rs 20,000 but most of them are lax in following this rule.
There is no scrutiny of the accounts submitted by the political parties. Although the Election Commission has the power to de-recognise a party if it is not in full compliance with the rule, it has never invoked it.
The Association for Democratic Reforms, a reputed non-government organisation, which studied available data, found that as much as 63 per cent of the donations received by the seven national parties during the 11-year period from 2004 to 2015 were in the form of cash.
It is said that during the last financial year they received Rs 1.02 billion from 1,744 donations of more than Rs 20,000. The BJP which received Rs 760 million from 613 donors was the major beneficiary. The Congress which received Rs 200 million from 918 donors was a distant second.
The ADR concluded that the relatively small number of donations above Rs 20,000 disclosed by the parties indicated that they got most of their funds from unknown sources.
In last week’s budget speech, Finance Minister Arun Jaitley announced reduction of the limit on anonymous donations from Rs 20,000 to Rs 2,000 and introduction of electoral bonds for the benefit of those who wished to make large donations anonymously.
Under the new scheme, donors can buy bonds from designated banks and present them to parties of their choice, which can redeem them through the Election Commission or a regulatory body set up for the purpose. This will not make for transparency, as the government claims.
If the government is serious about ensuring transparency in political donations it should evolve a foolproof scheme after discussions with the major parties on the basis of the recommendations the Law Commission made two years ago.
The Commission did not consider state funding feasible. It proposed amendment of the Companies Act to vest the power to decide on political donations in the annual general meeting of shareholders instead of the board of directors.
At present, candidates are required to furnish information on expenditure incurred by them after filing of nomination papers. The Commission suggested that they should be made to account for all expenses incurred from the date of notification of the elections.
To ensure transparency it asked the Election Commission to make available at its website or on file for public inspection all contribution reports submitted by the political parties. In the same way the election officer of each district should make available to the public the expenditure reports submitted by the contesting candidates.
The ADR has proposed bringing party finances under the purview of the Right to Information Act so that the members of the public can seek information about the donors and the amounts donated. This will make it possible for the voters to find out who are financing a party and ascertain if the party is returning the favour in any form.
The enormous cost which the contesting parties and candidates have to bear is one of the factors responsible for rampant political corruption. There is no limit on the amount a party can raise and spend. However, there is a ceiling of Rs 7 million on the expenses of a Lok Sabha candidate and of Rs 2.8 million on those of an Assembly candidate in all but nine very small states where the limits are lower.
In the big states a parliamentary constituency may have more than two million voters. Many candidates are believed to exceed the set expenditure limit and falsify the statement of accounts given to the Election Commission to hide the breach of the law.
The political parties can accept donations from individuals as well as private companies. Until now they were required to file statements every financial year giving details of contributions of more than Rs 20,000 which they have received from individuals and companies. To qualify for tax exemption they had to provide names and addresses of those who donated more than Rs 20,000 but most of them are lax in following this rule.
There is no scrutiny of the accounts submitted by the political parties. Although the Election Commission has the power to de-recognise a party if it is not in full compliance with the rule, it has never invoked it.
The Association for Democratic Reforms, a reputed non-government organisation, which studied available data, found that as much as 63 per cent of the donations received by the seven national parties during the 11-year period from 2004 to 2015 were in the form of cash.
It is said that during the last financial year they received Rs 1.02 billion from 1,744 donations of more than Rs 20,000. The BJP which received Rs 760 million from 613 donors was the major beneficiary. The Congress which received Rs 200 million from 918 donors was a distant second.
The ADR concluded that the relatively small number of donations above Rs 20,000 disclosed by the parties indicated that they got most of their funds from unknown sources.
In last week’s budget speech, Finance Minister Arun Jaitley announced reduction of the limit on anonymous donations from Rs 20,000 to Rs 2,000 and introduction of electoral bonds for the benefit of those who wished to make large donations anonymously.
Under the new scheme, donors can buy bonds from designated banks and present them to parties of their choice, which can redeem them through the Election Commission or a regulatory body set up for the purpose. This will not make for transparency, as the government claims.
If the government is serious about ensuring transparency in political donations it should evolve a foolproof scheme after discussions with the major parties on the basis of the recommendations the Law Commission made two years ago.
The Commission did not consider state funding feasible. It proposed amendment of the Companies Act to vest the power to decide on political donations in the annual general meeting of shareholders instead of the board of directors.
At present, candidates are required to furnish information on expenditure incurred by them after filing of nomination papers. The Commission suggested that they should be made to account for all expenses incurred from the date of notification of the elections.
To ensure transparency it asked the Election Commission to make available at its website or on file for public inspection all contribution reports submitted by the political parties. In the same way the election officer of each district should make available to the public the expenditure reports submitted by the contesting candidates.
The ADR has proposed bringing party finances under the purview of the Right to Information Act so that the members of the public can seek information about the donors and the amounts donated. This will make it possible for the voters to find out who are financing a party and ascertain if the party is returning the favour in any form.
Unfortunately, political parties wish to operate in secrecy. They are, therefore, unlikely to go beyond cosmetic measures. -- Gulf Today, Sharjah, February 7, 2017
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