Not enough to fix poll funding

Many had praised Finance Minister Arun Jaitley's decision to dedicate an entire section of his annual Budget towards 'enhancing' greater transparency in political funding. They argued that some of the proposals listed in the section titled, 'Transparency in political funding', has indeed burnished the ruling National Democratic Alliance's anti-corruption credentials. One can laud the Centre's intent to clean up political funding. Many Indians are of the opinion that political financing has become a major conduit for black money in the country, leaving parties little incentive to crack down on it. The political motives behind the move are evident in light of the blowback the BJP-led Centre has suffered after its ill-advised currency exchange measure, popularly known as demonetisation. The party has spent the last three months demonising cash. Nonetheless, the party maintains a willingness to prefer anonymous cash donations as detailed in studies conducted by the Association for Democratic Reforms (ADR). Similar to Prime Minister Narendra Modi's apparent directive last year asking all BJP legislators and parliamentarians to submit details of their bank transactions between November 8 and December 31 to party chief Amit Shah, Jaitley's announcement on Budget day is indicative of a strategy where the message is more important than any real tangible impact. There are two new measures he introduced in the Budget that has garnered praise in some quarters: capping anonymous cash donations to political parties at Rs 2,000 from the current Rs 20,000 and allowing parties to issue electoral bonds to raise money. The decision to cap cash donations to one-tenth the current level is in line with a recommendation by the Election Commission.

Delving into the details of these provisions, one can ascertain the lack of any real impact. Capping cash donations at Rs 2000 without a similar limit on the number of these transactions or even a detailed disclosure about the donors will do little to enhance transparency. In the history of Independent India, most political parties have a displayed a tendency to follow the law only in letter and not in spirit. To bypass these constraints, they will instead start printing out more receipts. Before Jaitley's announcement, all contributions above Rs 20,000, with the names, addresses and PAN numbers of the donors, were to be submitted to the Election Commission. Analysis by the ADR, however, show that most parties circumvent this rule by attributing significant portions of their income to contributions less than Rs 20,000, with PAN numbers, addresses and names often missing. "Such unknown sources include 'sale of coupons', 'Aajiwan Sahayog Nidhi', 'relief fund', 'miscellaneous income', 'voluntary contributions', 'contribution from meetings/ morchas' etc.," says a recent ADR report. "The details of donors of such voluntary contributions are not available in the public domain." In other words, parties will now be inclined to do the same, except under Rs 2,000. Similarly, the electoral bond also seems like an innovative measure. However, as Jaitley's Budget statement reads, "These bonds will be bearer in character to keep the donor anonymous". The critical problem with political funding is that nearly 80 per cent of the declared income of parties comes from unknown sources. In keeping the donor's name anonymous, the Centre has conveniently constructed yet another barrier to greater transparency. Through these insights, one can indeed gather that the Modi government isn't very serious about fixing India's broken political funding system. A real forward movement in this regard would have been to get rid of the very notion of anonymous donors. "Transparency in political financing will happen when the political establishment realises that the only way to get out of the shackles of big and black money is to become open," said Jagdeep S. Chhokar, the former director of IIM-Ahmedabad, in a recent column. "The government can do this by revising its affidavit in the Supreme Court to say all political parties should be under the purview of the RTI Act, thus honouring the Central Information Commission's 2013 decision."

In a landmark 2013 judgment, the Central Information Commission (CIC) ruled that all six national political parties come within the ambit of the RTI. "It would be odd to argue that transparency is good for all state organs but not so good for political parties, which, in reality, control all the vital organs of the state," the CIC had said in its order. As per the order, the CIC clearly stipulated that the BJP, Congress, CPI(M), CPI, NCP and BSP are public authorities, as the Central government has substantially financed them. Both the previous UPA government and the current ruling dispensation have argued against this position. Political parties must get out of their default pattern of financing and make sure that the electoral system does not become a victim of black money generation. Further, parties should stop accepting cash. With the rising popularity of the cashless or less cash narrative, political parties should work towards receiving funds via digital payments or through cheques. It is to be noted that these are only some of the initial steps they should take. Parties must clean up their act and establish a workable framework for clean politics.