Balvinder Singh
At a time when there is an unprecedented crackdown on black money in the country, when there is a thrust on making the common man’s source of income transparent thereby ensuring a corruption free society, why shouldn’t the same yard stick be applied to the political parties? Shouldn’t their source of funding also come under scrutiny? Shouldn’t political parties now agree to bring transparency in their financial transactions? At a time when government is ushering the entire country into an era of transparency, why then is there reluctance on the part of the political parties to make their sources of funding and expenditure entirely transparent?
The problem of corruption arises in any institution that depends on financial support from people who have interests that may conflict with the primary purpose of the institution.”Institutional corruption is manifest when there is a systemic and strategic influence which is legal, or even currently ethical, that undermines the institution’s effectiveness by diverting it from its purpose or weakening its ability to achieve its purpose, including, to the extent relevant to its purpose, weakening either the public’s trust in that institution or the institution’s inherent trustworthiness.”
How much does the public really know about the sources of funding of the political parties? It is essential for the people to know the details of funds collected by parties in cash, especially from ‘unknown donors’ as also the parties’ electoral expenditure.
Political Parties, in their defence, state that they submit details of all donors (who donate above Rs 20,000), to the Election Commission of India (ECI) as mandated under section 29C of the Representation of the People Act, (RPA) 1951. Section 13A of the Income Tax Act grants 100% tax exemption to political parties provided that:
(a) such political party keeps and maintains such books of account and other documents as would enable the Assessing Officer to properly deduce its income therefrom;
(b) in respect of each such voluntary contribution in excess of twenty thousand rupees, such political party keeps and maintains a record of such contribution and the name and address of the person who has made such contribution; and
(c) The accounts of such political party are audited by an accountant as defined in the Explanation below sub-section (2) of section 288.
The political parties will not be provided tax exemption if they fail to submit a copy of their donations report to the ECI, for every financial year.
Funds Collected during Lok Sabha elections (2004, 2009 and 2014)
Apart from the audit and donations reports, political parties are also required to submit a statement of election expenditure to the ECI providing details of the funds received in the form of cash, cheques and Demand Drafts. These statements only include those funds collected from the date of announcement of elections to the date of completion of elections, which could be between a few weeks and 3 months based on the notification issued by the ECI.
Association for Democratic Reforms (ADR) had analysed the election expenditure statements submitted by the National Parties (BJP, INC, NCP, BSP, CPI & CPM) during the three Lok Sabha elections held in 2004, 2009 and 2014. The report states that during the three Lok Sabha elections, BJP collected a total of Rs 1, 171.38 crores while INC collected Rs. 778.49 crores, BSP, Rs 110.45 crores, NCP, Rs.90.95 crores. CPI and CPM had collected Rs 19.74 crores and Rs 66.27 crores respectively.
It is interesting to note that during Lok Sabha elections held in 2014, the National Parties collected a whopping Rs 1158.59 crores within just 75 days, which was the time between the date of announcement of elections and the date of completion of elections! The funds collected by the National Parties during the most recently held Lok Sabha elections increased by 35.53% to Rs 1158.59 crores from Rs.854.89 crores collected during the Lok Sabha 2009. The report gives a party-wise figure of the funds collected and in descending order, BJP- 588.45 crores, INC -350.39 crores, NCP- 77.85, BSP- 77.26 crores, CPM – 55.12 croresand CPI – 9.52 crores.
Unknown sources of funding of parties
It is crucial to note here that only the donations reports that the parties submit, containing details of all the donors who donate above Rs 20,000, contains complete information while the election expenditure statements nor the income tax returns state the sources of parties’ income. While analysing the income tax returns and donations reports of National Parties for the period between FY 2004-05 and 2011-12, ADR’s report noted that more than 75% or Rs 3,675 crores received by the six national parties came from “unknown sources”.
Defaulting political parties
Not all parties file their donations and audit reports to the ECI on time. A case in point is the status of submission of donations and audit reports to the ECI for the FY 2015-16. While the last date for submission of the statements was 31st October, 2016, CPM and BJP have not yet filed their donations report while BJP, INC and NCP have defaulted in submitting a copy of their audit report to the ECI. Despite the repeated violation of sub-section (3) of section 29C of the Representation of the People Act 1951 by almost all the major National as well as regional political parties,rarely any party is ever penalised, either by the Income Tax department or by the ECI.Hence the political parties are beneficiaries of 100% tax exemptions!
Basic questions of a common man
Since demonetization came into effect, the government has indicated that the Income Tax (IT) Department may turn its scanner on account holders who deposit more than Rs. 2.5 lakhs in cash in their accounts either in one go or in instalments. A question would be raised whether the Income Tax department would look into the accounts of the powerful politicians/ Ministers making deposits above Rs. 2.5 lakhs, with the same degree of suspicion as they would scrutinize an ordinary citizen who makes similar high value deposits!
Does the common man have no right to ask from all the political parties to disclose details of their total income, not only of those who contributed above Rs 20,000 but also of those who have contributed below Rs 20,000?The problem of corruption may arise in any institution, especially in those that depend on financial support from corporate houses and individuals who might have interests that may conflict with the primary purpose of the institution. The state of unrestrained political corruption, known as a kleptocracy, should never be permitted to overtake the democracy of our nation!
Thus, a common man on the street has a basic question – why is there a difference in the yardstick? Why is a double standard being adopted by the law makers while dealing with the common man and the political class?While the common man is being asked to reveals detail of their accounts, the same does not seem to be applicable to the political parties when they do not reveal the names of their donors. Why scrutinize funds of just the public while parties go scot free?
It is, after all, only fair for us to state that we are getting ready for cashless transactions, isn’t it time for the parties to get ready to accept cashless donations? Otherwise it will again prove that “NETAS PREACH BUT NEVER PRACTICE”.
(The author is an RTI activist)
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