Government slashes anonymous political funding, opposition calls it hogwash (Roundup)

Updated on : Feb 01,2017   7:28 pm

New Delhi, Feb 1 (IANS) To ensure greater transparency in political funding, Finance Minister Arun Jaitley on Wednesday sharply cut the cash donation a political party can accept and announced "electoral bonds" to promote legitimate funding of parties.

Not impressed with the move, the opposition called it mere hogwash and instantly questioned the source of funding of Prime Minister Narendra Modi's "hugely expensive" election rallies.

Presenting the Union Budget for 2017-18, Jaitley said any anonymous cash donation to a political party will now be limited to Rs 2,000 -- a sharp drop from the Rs 20,000 limit earlier -- and that political parties would now have to take donations above Rs 2,000 through cheque and digital payments.

Further, the Reserve Bank of India (RBI) would issue bearer bonds that a donor may buy through cheques and digital payments. He or she can then give the bond to a political party which must deposit it within a month in a pre-determined account.

While this gives the donor the option of remaining anonymous both ends of the transaction will happen through the banking system.

The government's decision to reduce cash donations will require political parties receiving a donation above Rs 2,000 to disclose the identity of the donor.

Earlier, most of the political parties had been declaring that a majority of their donations were below Rs 20,000 and thus anonymous.

Jaitley said the government proposes to amend the RBI Act for issuing the electoral bonds under the new scheme.

"This will bring greater reform in political funding while preventing future generation of black money," the Finance Minister said.

He said the government has accepted the Election Commission's recommendation to bring transparency in political funding.

The commission had asked the government, among other things, to bring down the limit of anonymous donations to Rs 2,000.

"Even after 70 years of independence, there is no transparency in political funding. Most donations are received in cash and the donors too hesitate to disclose their identity," Jaitley said.

However, the opposition was not impressed with the move.

"This is a meaningless move in a directionless budget. If they actually want to bring transparency in political funding, they should have created a national electoral corpus in consultation with Election Commission and all major parties," Congress leader Anand Sharma said.

He explained the unified fund should be used to fund all recognised national and state political parties.

CPI-M General Secretary Sitaram Yechury too said as much, adding that corporate funding of political parties should immediately stop.

"The corporates should instead donate to this national electoral corpus instead of directly donating to parties," Yechury said.

He also demanded a cap on spending by political parties during election campaigns.

"Currently there is a cap on spending by candidates but not on parties. Parties can spend as much as they like. For example, you can see the hugely expensive election rallies of Prime Minister," the CPI-M leader said.

He said people can now not donate in cash but they can provide free services such as free buses for a rally or food packets for 10 lakh people.

"Where is the accountability for that?" he asked.

Anand Sharma also echoed similar sentiments. "They are talking of transparency. Will they tell where is all the money for helicopters, chartered planes and cars for BJP leaders during election rallies coming from?" Sharma wondered.

Regional bigwigs such as Samajwadi Party (SP) and Mayawati-led Bahujan Samaj Party (BSP) too failed to see any merit in the move.

SP Rajya Sabha member Naresh Agrawal termed the move as "jumla" (hogwash), saying nothing would change on the ground.

"The parties which earlier showed one lakh rupees by five donors, will now show through 50 donors. Nothing is going to change and no transparency can be brought in this way," Agrawal told IANS.

BSP's Rajya Sabha MP Veer Singh said the move is meaningless for them as most of his party's donations come in small amounts, which are much below Rs 2,000.

As per the report by Association of Democratic Reforms (ADR) on sources of funding of national and regional parties, BSP is the only party to consistently declare receiving no donations above Rs 20,000 between 2004-05 and 2014-15.

An ADR report on sources of political funding had last month revealed that over two-thirds of the funds of national and regional parties were from 'unknown' sources.