Leaving all political parties firmly on the backfoot, the ruling BJP on Wednesday used the Budget to seize the initiative on “cleansing” the system of political funding.

“I welcome the historical step to bring transparency and cleanliness in political funding by restricting cash donations to ₹2,000,” tweeted BJP President Amit Shah even as the Budget was still being presented.

The Budget lowered the cap on anonymous individual donations from ₹20,000 to ₹2,000 and introduced a proposal in the Reserve Bank of India Act to enable the issuance of electoral bonds to facilitate purchase of such instruments from authorised banks against cheque and digital payments. The bonds shall be redeemable in the designated account of a political party within a prescribed time. Finance Minister Arun Jaitley termed it as an idea whose time has come. He simultaneously credited Prime Minister Narendra Modi for the “campaign” for clean politics.

“It was time we corrected the system of political funding. Our claim is that we are the world’s largest democracy and fastest-growing economy. We cannot simultaneously be funded through shadow economy. It is a campaign undertaken by the Prime Minister since demonetisation,” Jaitley said after the Budget.

The BJP is as much part of the shadowy system of political funding as the others, having received as much as 65 per cent of its total income amounting to ₹2,125.91 crore from “unknown sources” during a period of 11 years, according to a report by the Association for Democratic Reforms (ADR).

The Congress received ₹3,323 crore, amounting to 83 per cent. The BSP, another national party, showed 100 per cent of its income having come from unknown sources. But the BJP has shown that it is part of the solution and not the problem by complying with the Election Commission’s recommendation about reducing the cap on individual donations and introducing a system of donation through bonds.

Reducing the cap is a significant move as the previous rule about disclosure pertaining only to donations in excess of ₹20,000 allowed contributors to tailor their packages just below this threshold value.

The usually combative Congress Vice-President, Rahul Gandhi, supported the move while the party’s Deputy Leader in the Rajya Sabha Anand Sharma, added a tame caveat. “If the government was keen to reform political funding they should have created a national corpus to fund elections,” he said.

The CPI (M) said a more meaningful step would have been to curb corporate funding and fix an overall limit on expenditure of parties as opposed to individual candidates.

The debate will naturally be framed around what the Budget proposals contain. Once again, it is the BJP and the Prime Minister who have set the framework for future discussions on political funding.

(This article was published on February 1, 2017)
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