Business Today

Political parties should account for every rupee

Huge election costs are among the root causes of corruption in the country. Greater financial transparency of political parties can certainly make a big impact in containing corruption.

Sebastian P.T.        Last Updated: July 1, 2013  | 21:09 IST

Sebastian P.T.
Sebastian P.T.
It is rare to see political parties across the spectrum sink their differences and join hands. But soon after June 3, the day the Central Information Commission (CIC) ruled that the six national parties do come under the purview of the Right to Information (RTI) Act, this phenomenon did occur. In one voice, all six-Congress, Bharatiya Janata Party (BJP), Communist Party of India-Marxist (CPI-M), Communist Party of India (CPI), Bahujan Samaj Party (BSP) and Nationalist Congress Party (NCP) - opposed the idea.

Unless the government brings in a law to keep them out, the six parties will have to from now on provide information about their sources of funding, internal party democracy, their criteria for selecting candidates for elections and much more. The RTI Act says any "non-government organisation substantially financed, directly or indirectly by funds provided by the appropriate government" does come under its purview. The complainants argued before the CIC that political parties got state funding in the form of offices, bungalows, land at prime locations; paid a fraction of market rent; got income tax exemption, and, free airtime on Doordarshan and All India Radio.

"Political parties are public authorities as they are a link between the citizens and the government. They are not private entities like, say, a music club," says Prof Trilochan Sastry of IIM Bangalore and Founder-member of the Association for Democratic Reforms (ADR)- one of the two complainants who filed petitions before the CIC in March 2011 seeking political parties be declared public authorities. "They are akin to public institutions and need to be transparent," says Manipal Global Learning Chairman T.V. Mohandas Pai, who was part of the Bangalore Political Action Committee initiative that openly funded candidates in the recent Karnataka Assembly polls.

Political parties, however, argue that they are not public authorities. "Political parties are already accountable to the Election Commission," Congress General Secretary Digvijaya Singh told Business Today. The Election Commission of India (ECI), apart from its enormous constitutional powers on conducting and controlling elections, is the body that gives recognition to political parties. It can suspend or withdraw that recognition under certain circumstances. Apart from the ECI, details of all contributions of Rs 20,000 and above have to be provided to the Income Tax Department. Most politicians though feel that putting the same financial details in public domain would hardly make any difference.

But the politicos have other genuine concerns too. CPI-M chief Prakash Karat feels every internal process of a political party cannot be made open to public scrutiny. For instance, they cannot afford to reveal their political strategies - which may be in the form of secret minutes of a certain meeting - or why a particular candidate was selected for a particular constituency, and so on. Agrees Pai: "The release of such strategic competitive information will hurt their existence."

However, RTI or not, there is no reason why political parties should not voluntarily account for every rupee that they get or spend. While anyone making donations of Rs 20,000 or above is required to provide his PAN number along with his income tax details, financial transparency is far from complete. "There is a major loophole," says Sastry as it is not necessary to provide details of contributions below Rs 20,000. Again, assuming that all monies are being declared, a large chunk is usually that of nameless contributions and parties pass it off, say, as income from selling coupons of certain denominations. And, this runs into hundreds of crores of rupees. This perhaps is the biggest flaw and a route for black money, bribes and illegal money to get into the election system.

For instance, the BSP raised Rs 251 crore in the first two years of it coming to power in Uttar Pradesh in 2007. However, it had declared that every voluntary donation it got was less that Rs 20,000. That is, it did not have to show who gave them the money. In fact, BSP supremo Mayawati had an interesting explanation to the huge wealth she accumulated in a short time. "The BSP workers began contributing small sums directly to me after they came to know that I had no funds. My workers asked me to use the money as I wanted," she once famously said.

While this may be a blatant case, the fact is that almost every political party is not above suspicion. Elections involve huge costs and, in reality, the actual spend is many times the maximum amount a candidate can legally spend - Rs 40 lakh for a Lok Sabha seat and Rs 16 lakh for an Assembly seat. Ask BJP leader Gopinath Munde. In a strange moment of honesty for any politician, Munde said that he had spent about Rs 8 crore for his 2009 parliamentary election campaign while he had declared to the Election Commission that he had spent less than Rs 20 lakh. Of course, he has been served a show cause notice by the ECI on why he should not be disqualified for not filing a true account of his expenditure. The point, however, is that once elected, the focus of politicians would usually be not just to get the "investment" back but also to hoard enough for fighting more elections. This, results in the unholy alliance of profiteering businessmen and politicians, whether it is in tweaking policies or embezzling natural resources. Huge election costs, thus, is the root for corruption in the country. Greater financial transparency of political parties can certainly make a big impact in containing corruption.

Congress' Digvijaya Singh says that the Congress is not opposed to greater financial transparency. But, then things will move forward only if all other parties form a consensus too. Is that a utopian dream?

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