Chief election commissioner Nasim Zaidi on Saturday said that amendments to the Companies Act of 2013, removing cap on corporate contribution to political parties, are “basically hitting” transparency of funding.

An amendment to the Companies Act of 2013 allows donations by companies to electoral trusts only through account payee cheque, bank draft or electronic transfer, as part of the government’s purported tirade against blackmoney.

The amendment aims to bring transparency to political funding.

However, the bill, in another section proposes something which would potentially make the funding more opaque.

The amendment relaxes conditions for contributions made by corporate entities to political parties.

Currently, a company may contribute up to 7.5 percent of the average of its net profits in the last three years to political parties. The company is required to disclose the contributions made to political parties in its profit and loss account, along with the name of the political parties to which such contribution was made.

The amendments to the Finance Bill 2017 propose to remove: (i) the limit of 7.5 percent of net profit of the last three financial years, for contributions that a company may make to political parties. (ii) The requirement of a company to disclose the name of the political party to which a contribution has been made.

The amendments effectively allow companies to contribute any amount to a political party without making its name public.

Zaidi while speaking at the Association of Democratic Reforms’ annual conference said “Two things are likely to happen in future. There would be less and less transparency, and if I could say, there would be opaqueness will not be an exaggeration. This has increased the scope of receiving and spending more funds and of course the related impact.”

Zaidi said that earlier each company was required to declare in its profit and loss statement the amount contributed to and the name of the party. He added that the amendment has meant that now companies are not required to show the names of political parties they have contributed to.

“It has also been feared that there are chances and probabilities of shell companies being set up only for the purpose of donation to political parties including the channelization of foreign money through shell companies. This is one important change that has taken place with the (amendment) in Companies Act of 2013,” he said. He added that the election commission would see what changes the amendment will bring about.

Elaborating on allegations levelled by various political parties against EVMs. Zaidi said,’We will soon hold an all-party meeting in which they will be told how it is not possible to tamper with EVMs, as per our administrative and technical safeguard system.’

Recently 16 opposition parties had urged ECI to revert to a ballot system, claiming the faith of people in EVMs has been eroded.

The commission intends to use Voter-Verified Paper Audit Trail (VVPAT) in all coming elections to bring in more transparency and boost the confidence of people in the electoral process.

‘For VVPAT, we have got all the funds. We have placed an order for the supply of 1.5 million VVPAT with two PSUs Bharat Electronics Limited (BEL) and Electronic Corporation of India (ECI),’ informed Zaidi.

The CEC also said that the ECI had placed an order for the supply of VVPAT machines for use in elections.By September next year around 1.5 million VVPAT machines will be ready.

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