Reforms and Funding to Political Parties

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TOPIC: General Studies 2

Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Structure, organization and functioning of the Executive and the Judiciary Ministries and Departments of the Government; pressure groups and formal/informal associations and their role in the Polity.

Government has embarked on new exercise to purge the corruption which is the vein of electoral system, i.e. political funding. Nearly 70-80% of the funds given to political parties are never reported. The premise of it is that it is collected from unknown sources which means that nobody can question where it has come from. In a first, the government has brought down the limit of receiving donation to political in cash to Rs. 2000 from Rs. 20000 earlier.

Union FM had said that transparent method of funding political party is vital to the system of free and fair election and after 70 years of independence, this has to be atleast now done. This is the most significant statement which acknowledges the need for political reforms as there is non-transparency in political funding.

This demand was made by Election Commission which has been paid heed by the government. However, the reduction of amount of cash donation is a step in right direction but it will solve the problem partially. Earlier, for above Rs. 20000 donation, a cheque was to be paid. So political parties were taking lots of crores and converting them into smaller amounts so that they don’t have to be accountable for it. In a year, approx. 75-80% money collected which runs in thousand crores in absolute numbers, was from unknown sources. With bringing down the cash limit, there are full possibilities that the donations will be further converted into smaller amounts. So, this step doesn’t solve the problem entirely.

For this, digital payment can be made one of the option to make donations. Digital payment initiative is not only for the middle and the poor class people but also for the political people who are the leaders and should show the way.

SC’s role

Even after 70 years of independence, when no government had embarked on the exercise because they were averse to any electoral reforms particularly the political funding, SC directed the ECI to take action for it. However, no political partied were ready for such reforms. Though, the SC direction was in a different matter which is as below:

It was about irresponsible promises in the manifesto. SC observed that the parties make big promises and upon winning, they don’t fulfil it and don’t tell how they intend to meet the promises. So, SC directed the ECI to call the political parties and discuss a way out. The political parties opposed any regulation. They said that election manifesto is a valid, legitimate, political document. They have to tell the voters what they stand for and their promises. Thus there cannot be any restriction about the same. So, it was not directly related to political reforms but an attempt towards it.

However, as a result of it, SC said in 2002 that every candidate that files nomination paper has to give an affidavit which gives details of his/her total financial status and also criminal cases pending against him/her. Through this it came to know how people who had nothing initially were crorepatis after 5 years of one term of MLA and MP.

Need of reforms and SC intervention

Most of the electoral reforms have come from SC which shows that political parties have failed to rise to the occasion. Somebody has to take the initiative to make the democracy more powerful and when SC takes initiatives, it is said that judicial activism is not fair.

The guidelines of the SC that manifestoes should be responsible has now become a part of Model code of conduct during elections. This shows how the political reforms are slowly being spearheaded by all three pillars of democracy.

Two political partied were questioned by ECI and were censured on how they were going to raise their political resources and why they made the irresponsible statements. So now it shows that political parties will think twice before making irresponsible statements through manifestoes.

Other steps for reforms

State funding of election

Most talked about is Indrajeet Gupta committee of 1999 when they discussed problem of state funding of elections and not political parties.
It said that legally it will be tenable and most of the funding should be in kind provided there is internal democracy of every party.
But as no party succeeded to have internal democracy and transparency, the reform could not take place.
State funding of election is difficult to monitor. As it is for vidhasabha election, the limit is 28 lakh. But it is known that the election funding happens in crores of rupees. So the meagre amount given by state will not solve any purpose.
Thus, there should be funding of political party and not election and on basis of their performance. For every vote, if Rs. 100 is given. Then if there are 53 crore votes to the political parties, they will have that much money which is more than what they raise illegally.

Electoral fund

A rationale electoral fund should be created where the donors who want to maintain anonymity, can donate money here.
From this fund, the political parties can be funded based on their performance in the elections.

Electoral bond

Government is planning to bring out a scheme of electoral bonds where individuals as well as corporate houses can purchase bonds and give it to parties of their choice.
Though details are not known, there can arise the problem of secrecy. It can be counterproductive as right now all funding is secret from everybody. With the electoral bonds, it will not be a secret from government. This violates the right of those who wish to give anonymous donation.
Thus, the idea of electoral bonds need to be explored more.

Tax benefits

If the donation is given to electoral fund, then tax benefits should be given.
100% tax exemption to donation to political parties can be floated with more transparency mechanisms.

Connecting the dots:

What are various electoral and political funding reforms which need to be undertaken to bring in transparency and accountability in the Indian political environment. Describe.