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Jaitley's Political Funding Reform Will Add Heft to Modi's Anti-Graft Pitch

A large part of the rhetoric on demonetisation has been restricted to finger pointing by parties at one other’s resource generation capacity and mechanism.

Sumit Pande | CNN-News18

Updated:February 2, 2017, 12:03 AM IST
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Jaitley's Political Funding Reform Will Add Heft to Modi's Anti-Graft Pitch
Finance Minister Arun Jaitley.

New Delhi: A large part of the rhetoric on demonetisation has been restricted to finger pointing by parties at one other’s resource generation capacity and mechanism.

Those in power have alleged that any opposition to notebandi was equivalent to siding with the corrupt and black-marketers. Those against the proposition accused Treasury Benches of having leaked the privileged information to a select few.

That the problem is more deep and widespread is evident from a recent report by a non-government organisation, Bihar Elections Watch, on political funding of parties in Bihar for a decade beginning 2004-2005.

Based on the return filed by the parties, the data claims that more than 70% of the donations to national parties and close to 60% to regional were made is cash by anonymous donors. The Delhi-based think tank Association for Democratic Reforms or ADR also pegs this figure at 69% at the national level for the same period.

Finance Minister Arun Jaitley in capping the cash funding of parties to Rs 2000 has accepted Election Commission’s recommendation to curb the use of black money in politics in general and electioneering in particular.

The minister in his budget speech has announced that any funding above Rs 2000 would be done through cheques, digital transfer or bonds which would be issued by the RBI in favour of a particular party.

The FM’s proposal attempts to plug loopholes in the current laws on political donations exploited by parties to seek and mobilise funds.

The political funding in India is regulated by Representation of People’s Act, Conduct of Election Rules and Companies Act.

As rules stand today, if one were to donate Rs 19,999 to a party, if was neither incumbent upon the donor not the party to make public details of the payee. Now if ten thousand such donors give one rupee less than the threshold figure, a party can mop up close to Rs 20 crore.

In effect, by reducing the limit of the funding to one tenth, Jaitley is making this route of political funding non-viable.

The ruling party has called the measure historic. Information and Broadcasting(I&B) Minister Venkaiah Naidu says people are “anxious to see reforms in political funding and transparency of political parties”. Congress VP Rahul Gandhi says his party backs any move to bring in reforms in political funding.

But there are also skeptics like BJD MP BJ Panda who feels more needs to be done. “EC should forcibly audit political parties,” he says.

CPI MP D Raja raises a red flag on the efficacy of the measures announced. He feels problem is with parties which do not disclose details of donors which give more than Rs 20,000.

“On the other hand we have large companies which give money to influence policies,” he says, seeking measures to regulate corporate funding.

Apart from measures to curb anonymous political funding, FM’s speech has two other strong political messages intertwined to underscore the black-money narrative in poll-bound states. Proposed law against loan evaders and ban on any cash transaction above Rs 3 lakh.

Prime Minster Modi addresses his first rally in poll-bound UP later this week in Meerut. And these precisely would be the measure he may list before the audience as fellow up measure after midnight demonetisation.

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| Edited by: Ashish Yechury
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