Political funding

Most things cost money and democratic politics is no exception. Without money, political parties cannot reach out to voters, make them aware about their policies and agenda, and receive feedback. There can be nothing wrong if political parties solicit funds, but how they go about it is a vital public issue. For tied to this issue is a question of good governce — once a party gets elected to power, will it work for its voters or its paymasters? Having funded a party that goes on to form a government, will not the donor seek his pound of flesh by gaining unfair influence, business advantage and lucrative works? The debate continues to rage with the latest report by the Association of Democratic Reforms (ADR), which again shows that 69% of the income generated by 6 tiol and 51 regiol political parties between 2004 and 2015 — was from unknown sources and therefore untraceable. In those 11 years, their combined income zoomed to Rs 11,367.34 crore. The income from unknown sources for tiol parties increased by 313%, while that for regiol parties rose faster by 652%. Of the two parties leading the government at the Centre during this 11-year period, 83% of the Congress party’s income and 65% of the BJP’s income of BJP came from unknown sources. And the loophole continues to be those apparently humble, innocuous dotions below Rs 20,000 per individual — for which parties need not submit details of the donors to tax authorities. Mayavati’s Bahujan Samaj Party (BSP) takes the cake; it happens to be the only party to consistently declare receiving no dotions above Rs 20,000 in 11 years, which in effect means that 100% of the BSP’s dotions came from unknown sources. Among other regiol parties with such dubious record, prominent are the Samajwadi Party with 94% of income and Shiromani Akali Dal with 86% of income from sources like ‘voluntary contributions, sale of coupons and miscellaneous income’.

This puts into perspective the suggestion put forth by the Law Commission in 2015 that a party should also be made to mandatorily disclose dotions less than Rs 20,000, if these exceeded 20% of the party’s total funding. It remains to be seen whether Prime Minister rendra Modi follows through on his stance to bring about transparency in political funding, given that parties like BSP and Trimool have been vociferously up in arms against his demonetization move. It is doubtful whether a toothless Election Commission can respond to his urgings to pressurize parties to come clear on all dotions. With no political party so far working out a self-sustaining mechanism to fund itself, it is hardly surprising that it is the big corporate groups — primarily through their electoral trusts — that keep the parties primed and ready with money. An ADR report last December had highlighted that nearly 85% of dotions above Rs 20,000 to regiol parties came from corporations. Of the incomes declared by parties like Shiv Se, Jata Dal (United) and Sikkim Democratic Front, it was found that majority funds were contributed by a single corporate group. Recently, the trade and industry body FICCI suggested to the government that all corporate contributions to political parties should be made only in ‘non-cash modes’. However, such suggestions scratch only the surface, when political parties are determinedly resisting all calls to disclose information under the RTI Act, arguing that they are ‘not public authorities’. The Supreme Court, while recently dismissing a PIL challenging the constitutiol validity of Section 13A of Income Tax Act which grants exemption to political parties — put the ball in the government’s court that it is for the government to decide ‘who to grant tax exemption to’, and the court cannot interfere in such policy matters. Considering that the UPA government in 2009 decided to exempt electoral trusts (of corporate) from taxes, while the NDA government repaid the favour by telling the Supreme Court that bringing political parties under RTI Act will ‘impact interl working and political functioning’ — it is obvious that the political establishment will have its broad ‘understanding’ unless someone breaks this  pattern. Whether rendra Modi is willing to put his hand up (and make more enemies), only time will tell.