A year has passed but the Narendra Modi government continues to turn a deaf ear to the strong objections raised by the Election Commission (EC) over their failure to make political funding transparent.
The EC recommended that the Section 29 C of the Representation of the People Act be amended to be cap the limit of anonymous donations to Rs 2,000 from Rs 20,000. But the government has not made the amendments so far. The government had earlier made amendments in the Section 13 A of the Income-Tax (IT) Act to cap cash donations to Rs 2,000.
A top official of the Election Commission told The Quint:
We had already conveyed to the government that the amendments in the RP Act is required to bring uniformity with the amended IT Act. The government has not yet communicated clearly as to what they are doing. We can only presume that they are considering our recommendation.
The EC also seems to be unaware of government plans to bring in uniformity in the two Acts, the official said, adding that the Commission is waiting for the contribution reports to be filed by the political parties for the financial year 2017-18.
Since there is a dichotomy in laws, we don’t know how the political parties will interpret them. I don’t know what they will do. The returns filed to the Income Tax department and the contribution report filed to the EC by the political parties are generally cross-checked, so parties will try to keep it uniform.Election Commission official
The EC will decide the future course of action only after evaluating the contribution reports, the official said.
The Quint had earlier reported on the EC’s strong objection to the amendments made to introduce electoral bonds.
What Does Section 29C of the Representation of the People Act say?
The treasurer of a political party or any other person authorised by the political party in this behalf shall, in each financial year, prepare a report in respect of the following, namely... the contribution in excess of Rs 20,000 received by such political party from any person in that financial year.
Why Couldn’t The Govt Amend the RP Act With the IT Act To Bring In Transparency?
In order to curtail the use of black money and money laundering in political funding, the Election Commission, in 2016, recommended that the law be amended to bring down the limit of anonymous political donations to Rs 2,000.
Accordingly, Finance Minister Arun Jaitley said that “political parties receive most of their funds through anonymous donations which are shown in cash”. Section 13 A of Income Tax Act was amended and it was announced that political parties will not accept cash donations above Rs 2,000. The move was a bid to “cleanse the system of political funding in India” and was carried out in accordance with the suggestion made by the Election Commission,” Jaitley said.
In series of reports, The Quint has exposed the loopholes in the electoral bonds – that make it possible for the government to make their own political funding opaque, while allowing donors of the other political parties to be tracked.
What Does the Amended Section 13 A of the Income Tax Act say?
No donation exceeding Rs 2,000 is received by such political party otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account or through electoral bond.
EC’s Objections To the Govt
In a letter from the EC to the Ministry of Law and Justice in May 2017, the EC put forward a number of reasons why the amendments made in Acts to introduce electoral bonds should be reversed or modified.
In the same letter – exclusively accessed by The Quint – the EC pointed out the futility of the amendment of Section 13A of Income Tax Act because of non-amendment of Section 29C of the Representation of the People Act.
In objection to the amendment made to Section 13A of Income Tax Act, the EC said:
Is the Modi Govt Working To Make Political Donations Less Transparent?
The Supreme Court in its judgment on the Gajanan Krishnaji Bapat & Anr vs Dattaji Raghobaji Meghe & Ors; 1995 SCC (5) 347 said:
The political parties must disclose as to how much amount was collected by it and from whom and the manner in which it was spent so that the court is in a position to determine “whose money was actually spent” through the hands of the party.
But the Modi government seems to be doing just the opposite.
One such effort by the Modi-led government was the introduction of the electoral bonds in the Finance Bill 2017. With the amendment of the Representation of the People Act to introduce this new scheme, the political parties don’t have to report to the EC about their monetary gain through the bonds.
Clearly, the Modi government has a lot to do and undo in order to make political funding transparent.
(The Quint is now on WhatsApp. To receive handpicked stories on topics you care about, subscribe to our WhatsApp services. Just go to TheQuint.com/WhatsApp and hit send.)
(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)