In an ongoing debate on eradicating corruption and bringing in greater transparency in political funding, Prime Minister Narendra Modi and Bihar chief minister Nitish Kumar have come in support of the Election Commission (EC) for reducing the limit of anonymous donations to political parties. Modi said that the government is committed to “implement whatever decision is taken in the interest of people.”

In its slew of proposals to decriminalise politics and cleanse political funding, the EC, earlier this month, had recommended banning of anonymous cash donations over R2,000 to political parties. In its “Proposed Electoral Reforms,” the election watchdog, led by Chief Election Commissioner (CEC) Nasim Zaidi, has recommended exemption of income tax to be extended to political parties that contest elections and win seats in the Lok Sabha or assembly polls because many of these outfits could be fronts to siphon off black money. “There are over 1,900 registered political parties in India. After every two days, a political party is registered. They hardly contest elections. Many of them are used as conduits for siphoning off black money,” Zaidi said, adding that only 400 of them had contested polls during 2005-15.

The EC’s recommendations have been made to the law ministry which could further propose an amendment to Section 29C of the Representation of People Act, 1951 (RPA), which states that political parties should declare their donations, but only those above R20,000.

The CEC said the RPA should be amended to give powers to the commission to countermand an election on the ground of distribution of money to unduly influence the electorate, or politicians bribing voters.

The EC suggestions are in tune with the Law Commission’s report in 2015 on electoral reforms that had said that up to R20 crore or 20% of the party’s entire collection, whichever is lower, can be anonymous.

Welcoming the new proposals, senior lawyer and Congress spokesperson Abhishek Manu Singhvi said that the “reduction of limit of anonymous donations to political parties is certainly desirable and will go a long way in reducing misuse of tainted money. But the million dollar question remains the elusive political consensus. It also needs nitty-gritty rules and regulations to minimise abuse even of a new, lowered limit.”

Experts feel such recommendations on electoral reforms will help promote greater transparency in funding of political parties, but are doubtful if these proposals will ever be implemented due to lack of will among political parties.

“The declared donations explain only about 20-25% of income declared under IT returns for prominent political parties that contest polls. The balance of it is unknown and so is the information for nearly 2,000 political parties which do not put it out in the public domain. The whole thing about political funding is a black box and any recommendations like these will help in promoting transparency,” Jagdeep Chhokar, founding member of New Delhi-based Association for Democratic Reforms (ADR), told a newspaper.

Senior lawyer and Member of Parliament Vivek Tankha also agreed with the experts, saying that cleaning up political funding has to begin with political parties, especially the BJP, which is in power.

“It should be implemented in letter and spirit. But the BJP does not seem to be serious enough. This exercise was undertaken even four years ago, but nothing has happened so far,” he said.

However, BJP spokesperson Nalin Kohli said that his party is keen to implement the reforms. “There is no special exemption for political parties in the current situation. Just as an individual or an organisation, political parties also have to comply with the directions of RBI and are subject to explanation about any large deposit in their bank accounts,” Kohli said.

Though there is no clarity on what should be the new limit above which donors ought to disclose their identity, experts working in this area have identified the R20,000 threshold as a big loophole which appears to have been exploited by political parties, if only in varying degrees.

Kohli said that the EC proposal about the R2,000 limit on cash donations “will generate the required discussion, and in the current scenario where decisions are being taken to curb the menace of black money, obviously all aspects need to be examined.”

According to sources, data shows that over 85% of the total donations made to political parties are from unknown sources. As per data maintained by ADR, in financial years 2013-14 and 2014-15, the BJP received R673.81 crore and R970.43 crore, respectively, by way of donations. However, only R170.86 crore and R437.35 crore, respectively, were from named sources.

The corresponding figures for the Congress for the same periods are: R598.06 crore (R59.98 crore from named sources) and R593.31 crore (R141.46 crore from named sources). The BSP, which received donations of R66.91 crore and R111.95 crore in the two fiscals, claimed in communications to the EC that not a single donation was over R20,000. The Communist Party of India (Marxist) got R121.87 crore and R123.92 crore during 2013-14 and 2014-15, respectively, but just R2.09 crore and R3.42 crore came from named sources.

The EC, in collaboration with legal luminaries and institutions, is now working to address the need for a comprehensive review of the RPA. A task force in the law ministry is scrutinising the recommendations.

Now that the Law Commission and the EC have done their jobs, it’s for the political establishment to act on election reforms.

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