March 4: The use of black money, the worst-kept secret in Indian elections, burst through the veneer today with deputy Prime Minister .K. Advani acknowledging its prevalence and a premier business chamber throwing its weight behind an effort to clean up the system.
“Yes, it (the use of black money) is there. It is not a good thing. It is a question which is related not merely to politics, but to the economy also,” Advani told a television channel.
As Advani’s appeal asking all parties to ponder the issue was rolling on the screen, the Confederation of Indian Industry (CII) advocated state funding as well as corporate funding of political parties through cheques.
“We are only in favour of transparent electoral funding. The money given by the corporates should be clearly written in their balance sheets. We also propose state funding for elections,” CII president Anand Mahindra told a news conference.
Mahindra was speaking after a CII council meeting, which was also attended by BJP president M. Venkaiah Naidu and Congress leader Manmohan Singh.
The Congress, nudged by a panel headed by Singh, had in 2001 resolved to accept donations only through cheques, becoming the first party to do so. The Congress had made public the decision in 2001 when the then BJP president Bangaru Laxman was shown accepting money on tape by Tehelka.
Parliament had later passed a bill that allows companies to donate 5 per cent of their profit to political parties. If the donation is made in cheque, the companies can claim a tax relief.
The Tatas — who have spearheaded the drive to make funding transparent — have set up a formal fund, called the Electoral Trust, to handle donations.
According to the group’s policy, 50 per cent of the corpus, which has not been announced yet, will be distributed on the basis of the composition of the dissolved Lok Sabha. The balance will be disbursed after the formation of the new House, taking into account the changes in the strength of the parties.
Despite the Rs 25-lakh ceiling on each seat, a winning candidate alone spends on an average Rs 2 crore and others another Rs 2 crore. The money spent on all the 543 seats will easily cross Rs 2,000 crore, an analyst said. Most of this requirement is now met through unaccounted cash or black money.
Allaying fears that corporate funding might pave way for corruption, Mahindra said: “It is quite an acceptable objective to support policy makers. It is very well known that money is needed in the election process.
“If the money given is transparent and if the end use is known, there is no scope for corruption. Elections do cost money, let us recognise that fact.”
The Congress welcomed the CII’s suggestion for transparency in political funding.
“We welcome the CII suggestion about transparency in funding of political parties. We have always supported such a move,” party spokesman S. Jaipal Reddy told reporters.