'Smokescreen' scent in party funding rules

Hemmed in by the Election Commission's directive against making announcements that could impact the upcoming state polls, the budget's biggest "takeaway" evidently were the proposals seeking to clean up the system of political funding.

  • Published 2.02.17

New Delhi, Feb. 1: Hemmed in by the Election Commission's directive against making announcements that could impact the upcoming state polls, the budget's biggest "takeaway" evidently were the proposals seeking to clean up the system of political funding.

It was instantly hailed as a "game-changing" decision but those clued in saw it as a smokescreen as it does not make political party funding any more transparent. It has also left enough avenues open for parties and donors to work the system.

The four steps that finance minister Arun Jaitley announced to cleanse the system included the Election Commission's suggestion to reduce cash donation from one person to Rs 2,000 from the existing Rs 20,000 limit.

The other three steps are: parties will be entitled to receive donation by cheque or digital payment; electoral bonds to be issued by the Reserve Bank of India; mandatory filing of income tax returns by every party within the stipulated time.

Two of these four steps being celebrated as new already exist. The founder member and trustee of the Association for Democratic Reforms, Jagdeep Chhokar, had a counter question to the cheque payment provision: "Were political parties not entitled to receive money by cheque before? This is not only a smokescreen, it is a very poor smokescreen."

According to Venkatesh Nayak, who co-ordinates the Access to Information Programme at the Commonwealth Human Rights Initiative, parties are even now expected to file IT returns within a stipulated time "but there has not been a single instance of any penal action against a party that fails to do so". Let alone penal action, even notices are not sent to them.

Of the two proposed measures, the activists said the Rs 2,000 ceiling on cash payment would just see a lot many more people making smaller donations to game the system.

"When the chaiwala and rickshawwala are being told to go digital for the pittance they make, why are political parties being even allowed to accept cash payments?" Chhokar asked.

As for the RBI bonds, the verdict is reserved. Investors in the bonds will be required to provide personal details while purchasing these bonds through cheques or through digital transactions from designated banks, which can then be handed over to the preferred political party. The party can then cash the bond for its electoral funding.

However, Chhokar wanted to know if the RBI would release details on who bought the bonds and for how much. "If not, then where is the transparency?"

While several industrialists, including Anand Mahindra, welcomed the proposals as did the chambers of commerce and industry, the response from the political class - which is under the scanner here - was mixed.

Congress vice-president Rahul Gandhi tweeted within minutes that "any step to clean political funding will be supported by us". But the sense that this is essentially another attempt to play to the gallery came across in the detailed response to the budget by the party.

Congress spokesperson Anand Sharma dismissed the proposal as a "joke", arguing that the government should have evolved a consensus among parties on electoral reforms if it was serious about addressing the genuine concerns on political funding. "The first step could have been setting up an election fund."

Sharma said: "The BJP should first explain who is funding its big public rallies. How many planes and helicopters have been hired for the elections in the five states?"

#For the BJP, this was practically the only major talking point about the budget. Party chief Amit Shah termed historic the announcement to restrict cash donation to Rs 2,000 to a party from one source.

Jaitley explained: "It was time we created a system of political funding. Our claim is that we are the world's largest democracy and fastest-growing economy. We cannot have this funded through the shadow economy. It is a campaign undertaken by the Prime Minister ever since demonetisation."

The CPM's Sitaram Yechury dubbed this as yet another " jumla" (rhetoric). "Why is there no ban on corporate donations to political parties? We will fully support a law like the CSR law to create a corpus to fund political parties - a Democracy Fund managed by the Election Commission.

"Why have they not proposed a ceiling on a party's expenditure during an election like the one on candidates? There is nothing stopping parties from demanding payment in kind. Who paid for all those vehicles that brought people to the Prime Minister's Lucknow rally in January?"