Hindustan Times
Deeksha Bhardwaj

In a letter written to law minister Kiren Rijiju , chief election commissioner Rajiv Kumar proposed an amendment to the Representation of the People (RP) Act to “cleanse political funding landscape”.

Cash donations to political parties above 2,000 cannot remain anonymous, the Election Commission of India has suggested in a draft amendment, down from the present ceiling of 20,000. It has also sought to limit cash donations to 20 crore or 20% (whichever is lower) of the total donations received by a party, people familiar with the matter said.

In a letter written to law minister Kiren Rijiju , chief election commissioner Rajiv Kumar proposed an amendment to the Representation of the People (RP) Act to “cleanse political funding landscape”.

“The first step was to take action against unrecognized parties. Now the Commission is moving to try reform the way recognised parties work and crackdown on black money and tax evasion,” a person familiar with the matter said on condition of anonymity.

Political parties have to disclose details of cash donations of 20,000 or more to the poll watchdog, including the entity they received it from.

The poll body has also recommended that each candidate open a separate bank account for election purposes. “If a candidate contests as an MLA first and then decides to contest as an MP later, two separate accounts need to opened for each election. Basically, for each poll contested, the candidate must open a separate bank account. This way the Commission can keep track of the candidates expenditure limits and bring transparency to the system,” the person said.

The Commission found that while some parties reported no donations , their audited accounts statement showed receipt of huge amounts, proving large-scale transactions in cash below the threshold limit of 20,000.

As part of bringing transparency into the expenditure of individual candidates contesting polls and to remove “fungibility” in this expenditure, the Commission has sought that digital transactions or account payee cheque transfers should be made mandatory for all expenses above 2,000 to a single entity or person.

The amendment will have to be made in Rule 89 of the Conduct of Election Rules, 1961.

The Commission has also sought “electoral reforms” to ensure that no foreign donations creep into the funds of the parties as stipulated under the RP Act and the Foreign Contribution Regulation Act, 2010. At present, there is no mechanism to segregate foreign donations at the initial stages specifically, and the present format of contribution report is “not equipped” to seek additional information.

The decision comes shortly after EC delisted 284 non-existent but registered unrecognised political parties (RUPPs) and declared 253 others as inactive as it continued its crackdown on such organisations for violating the provisions of the RP Act, the poll panel said. With the latest order, the number of such political parties flagged by the poll panel for failing to comply with electoral rules rose to 537.

On September 7, the income tax department conducted raids at over 50 locations in multiple states as part of a tax evasion probe against RUPPs . The IT department on September 11 said RUPPs in Gujarat have amassed over 4,000 crore worth of donations in the past three financial years.

In May, the Commission said 199 RUPPs took the benefit of income tax exemptions amounting to 445 crore in 2018-19 and 219 RUPPs amounting to 609 crore in 2019-20.

“How will the Commission monitor cash? You can only monitor it if it is declared,” said Jagdeep Chhokar of the Association Democratic Reforms, a non-profit. “This law cannot be implemented. The premise of the Commission is that people will honestly declare how much money they gave to political, or political parties will disclose how much they received.”

“In any case, the money declared by political parties is the tip of iceberg,” Chhokar said. “A lot more the money is spent on the polls.”

© Association for Democratic Reforms
Privacy And Terms Of Use
Donation Payment Method