Finance Minister Arun Jaitley, in his 2017 budget speech, stressed the government’s commitment to cleansing the system of political funding. ‘Money power’ is the bane of our electoral system. Political parties are collecting and spending huge amounts of money for elections, 70 percent of which is from unknown sources and a substantial percentage is, allegedly, black money.
However, the pious intentions of the government do not match the deeds.
The Finance Act, 2017, passed as a money bill, introduced ‘Electoral Bonds’; and then amended the RBI Act, RPA 1951, IT Act 1961 and the Companies Act 2013 to accommodate the Electoral Bonds scheme. These affect transparency adversely.
Going forward, the annual contribution report of political parties to be furnished to the Election Commission of India (ECI) need not mention names and addresses of those contributing by electoral bonds. The previous cap on the corporate donations of up to 7.5% of net profits of the companies in the last 3 years has been lifted by amending of the Companies Act 2013. Companies need not disclose the name(s) of the political parties to which the donations are made.
Corporate funding will increase manifold with no upper limit on the amount of donations, identity of donor willbe hidden, even loss-making companies will now donate, shell companies may be formed, benami transactions will rise, as will black money and corruption.
The ECI has, in a written reply to the standing committee on Personnel, Public Governance, Law and Justice stated: “introduction of the Electoral Bonds scheme would compromise transparency in political funding. Amendment to Sec 29(C) of the RPA Act, 1951, making it no longer necessary to report details of donations received through electoral bonds, is a retrograde step”.