Indian Express: New Delhi: Friday,
February 03, 2017.
The 2017-18
Union budget had an unusual feature, a section titled “Transparency in
Electoral Funding”. Many commentators have hailed it as a positive step. But is
it? An interview with Finance Minister Arun Jaitley in this newspaper is revealing.
He stated: “The present system has failed and we are experimenting with a new
system”. The “Key Features of Budget 2017-2018” put out by the government
contain six statements on transparency in electoral funding. Only two are
action-oriented.
Of the two,
the first pertains to a reduction in the limit for cash donations to Rs 2,000
from Rs 20,000. While it looks like a sizeable reduction, it is unlikely to
have any real impact. Past experience shows political parties follow the law
only in letter and not in spirit. While the existing law required them to
disclose donations of more than Rs 20,000 each in order to avail the 100 per
cent exemption from income tax, it never forbade them from disclosing donations
of less than Rs 20,000.
The other
concern is the disparity between what ordinary citizens are being exhorted to
do and what political parties are being enabled to do. Ordinary citizens are encouraged
to make payments using digital means. Political parties, on the other hand, are
being allowed to accept donations up to Rs 2,000 in cash. Another point that
follows is curious. It says, “Political parties will be entitled to receive
donations by cheque or digital mode from their donors.” This implies that
earlier, political parties were not entitled to receive donations by cheque or
digital mode.
The second
action-oriented point is, “the issuance of electoral bonds in accordance with a
scheme that the Government of India would frame” and the amendment to the RBI
Act to enable this. The details of the scheme will be known only when it is
formulated. But the interview with the FM offers a clue about what it is likely
to be. His statement reads, “These bonds will be bearer in character to keep
the donor anonymous”. The problem with political financing is that 75-80 per
cent of the declared income of political parties comes from unknown sources. If
the objective of the electoral bond scheme is “to keep the donor anonymous”,
then it seems to be the very antithesis of transparency.
The last two
points, though not action-oriented, do seem to strengthen the “shadow of
doubt”. These are: “Every political party would have to file its return within
the time prescribed in accordance with the provision of the Income Tax Act”
and: “Existing exemption to the political parties from payment of income tax
would be available only subject to the fulfilment of these conditions.” The
first of these has been in existence since 1979 and the second since 2003. To
include them in a “proposal to cleanse the system of funding of political
parties”, as the FM said in his budget speech, seems an effort to create a
mirage.
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. 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.
The
writer is former professor, dean, and director in-charge of IIM, Ahmedabad