Firstpost: New Delhi: Tuesday,
August 30, 2016.
The Times of
India (TOI) reported last week that political parties of India are a safe haven
for black money.
“Sure, the
government is on an overdrive for ridding the economy of black money and
promoting cashless transparent transactions, but the fact is that 70 percent of
all cash raised by India’s political parties, especially the BJP and the
Congress, comes from unknown donors – in income tax parlance it is called black money,” the report (August
23) said.
Quoting the
information put together by the Association of Democratic Reforms (ADR) — an
organisation relentlessly working for greater transparency and accountability
in our governance process – the TOI report said that in 2013-14, political
parties, in their income tax returns, had declared a total income of Rs 1,519
crore (the BJP had the highest share of Rs 674 crore while Congress came second
with a collection of Rs 598 crore)
But income
from unknown sources amount to more than 70 percent of their total income.
Unknown sources are income declared in the income tax returns but without
identifying who the donors are. The unknown sources include sale of coupons,
purse money, relief fund, voluntary contributions, contribution from meetings
and morchas. In each case, a consolidated figure is mentioned, without putting
out the names of individual donors. Needless to say, all such contributions are
in cash; the fact is that it is big black money which is being passed off as
small individual contributions by masses.
Only those
individuals and corporate houses that make their monetary contribution by
cheque and declare the same in their respective income tax returns find a
mention in the I-T returns of the parties. All those who ply their black money
into the coffers of the political parties in cash remain unidentified.
Such illegal
contributions come from two sources: First, big and medium business houses
which make cash donations and keep it off their respective balance sheets.
Second, wealthy individuals who make similar donations in cash. This is clearly
in exchange for quid pro quo.
That explains
why when more than Rs 2 crore went missing from the headquarters of the BJP in
Ashoka Road in Delhi in 2008, the party decided not to file a police complaint.
‘When asked why, party spokespersons said the burglary was being investigated
internally.’ How could it explain the source of the money – it was the dilemma.
Bhavdeep
Kang, a well-known journalist, spilled the beans when she wrote: “Sources in
the BJP office say the bulk of the money (Rs 2 crore) had been deposited by an
industrialist – ironically, one closely associated with the Congress – on
account of favours rendered to his company in BJP-ruled Chhattisgarh. The theft
was detected and a hue and cry was raised by a somewhat naive, if honest, party
official. He was told to hold his peace, but too late.”
But then BJP
is not the only party that thrives on black money. Congress, which ruled for
decades in both the Centre and several states, had made cash transactions, the
life-blood of its party organisation. Most other parties which fulminated
against the corrupt ways of the Congress followed its lead in
institutionalising corruption in their respective party framework.
Under the
aegis of the Congress government, Section 13A of the Income Tax Act enacted in
1961 exempted political parties from paying income tax. Political parties were
given 100 percent tax exemption from all sources of income. The only condition
stipulated in the Act (Section 139 4B) was that the political parties would be
required to file income tax returns in a prescribed format every financial
year, failing which the exemption would be withdrawn.
Despite such
mandatory requirement, all the political parties, both national and regional,
refused to file income tax returns for years but continued to enjoy income tax
exemptions. This was absolutely illegal, but both the ruling and opposition
parties were in cahoots to continue the illegality and the government agencies
were either coerced or bribed to hold their peace.
This went on
for several years till 1996, when the Supreme Court, responding to a public
interest litigation filed by the Common Cause (headed by the indefatigable HD
Shourie) gave a clear direction that the political parties failing to file
income tax returns would not be covered under the Section 13A of the Income Tax
Act.
The parties
were then left with no option but to file their I-T returns, but since I-T
returns used to be a closely guarded secret in India, that remained confined to
the files of the officials who merely acknowledged the receipt of the annual
returns. That brought the situation back to square one parties could sit pretty
by making any arbitrary claims, but did not have to account for it.
After the
Right to Information Act was passed in 2005, the Association of Democratic
Reforms (ADR) sought the copies of the I-T returns of different parties under
the same Act. But the income tax department used to the secretive manner of its
functioning over the years refused to oblige saying that information containing
details of commercial activities of political parties were exempt under the RTI
Act.
The ADR then
moved the Central Information Commission. Most political parties, including the
Congress and the BJP but excluding the Communist parties, raised their
objections to the ADR appeal before the CIC on the grounds of infringement of
privacy. The CIC, however, overruled the objections saying that political
parties could not claim special privileges while being very much an integral
part of the public life. In its order dated 29 April, 2008, the CIC directed
the income tax authorities to provide to the petitioner the details of the tax
returns of political parties within six weeks.
This decision
was a major setback to the parties. But the greater setback came when the full
bench of the CIC, in its order on 3 June, 2013, directed that six parties Congress,
BJP, CPM, CPI, NCP and BSP be designated as public authorities under the RTI
Act. “The presidents, general secretaries of these parties are hereby directed
to designate CPIOs and appellate authorities at their headquarters in six
weeks. The CPIOs so appointed will respond to the RTI applications extracted in
this order in four weeks time,” the bench directed.
The Manmohan
Singh government then considered the proposal to either issue an ordinance to
nullify the CIC order or to amend the RTI Act itself to the effect that
political parties were out of the purview of the RTI Act. But before it could
act, the UPA went out of power.
In any case,
the national parties had chosen not to comply with the CIC order. Frustrated,
RTI activist Subhash Chandra Agrawal and Anil Bairwal of the ADR, the original
petitioners to the CIC, moved the Supreme Court. In August 2015, the Narendra
Modi government made it clear in its submission to the apex court that it was
on the same page with the previous Manmohan Singh regime in opposing the CIC
stance. Since then the matter is pending before the highest court of the land.
It is
shameful that both Manmohan Singh and Narendra Modi and their finance ministers
P Chidambram and Arun Jatley respectively made big promises in eradicating the
menace of black money and enforced many salutary legal provisions to ensure
that wealthy individuals and corporate entities did not get away with their
illegitimate income, but when it came to their respective political parties which
are the biggest den of the black money these national leaders have been
stubbornly refusing to come clean.
The Supreme
Court must act swiftly and decisively to put an end to this national shame.
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