The Economic Times
New Delhi

NEW DELHI: The Election Commission of India is in favour of bringing down the political contribution limit at which parties have to identify donors from Rs 20,000 to Rs 1,000. The drastic cut in the ceiling on unnamed contributions a political party can receive is expected to strike a body blow to the almost opaque system of current political funding dominated by anonymous donations. 

The Election Commission in its draft of revised guidelines on political funding issued to all recognied political parties on Thursday asked all political parties to send their feedback within the next two weeks, failing which it would presume that they have no comments to offer on the issue and the measure would be formally notified. ET was the first to report on December 17, 2013, that the electoral watchdog was working on bringing down the ceiling on unnamed funding to Rs1,000. 

Election Commission moves to curb anonymous political funding
Following a Supreme Court order, political parties have to submit details of donors while filing income-tax returns. If any political party fails to identify donors, it would lose tax exemptions granted to it. The new guideline would make it more difficult for parties to thrive on unnamed sponsors. 
Parties avoiding names of contributors is viewed as the lubricant of Indian politics and as the root of much of the country's corruption in high levels. Unnamed benefactors accounted for 75 per cent of the funds collected by six national parties - Congress, BJP, BSP, NCP, CPM and CPI - between 2004 and 2012, according to the Association of Democratic reforms that analysed data from contribution statements submitted by the parties to the Election Commission and their tax returns. 
The Commission was initially in favour of identifying each and every donor, irrespective of the sum donated. The first letter circulated among political parties in August seeking feedback on the draft funding guidelines had proposed full disclosure. But after majority of parties pointed out that issuing receipts for every paisa donated was impractical, the Election Commission felt it was best that the Rs20,000 limit be lowered to Rs1,000. 
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