FinMin Wing & EC Agree On Opaque Political Funding, But No Action

With the 2019 LS election round the corner, shouldn’t the Modi-led govt make political funding more transparent?

2 min read
According to a report, 69% of political funding in the last 11 years has been from unknown sources.

From the Election Commission of India (EC) to the Financial Sector Legislative Reforms Commission (FSLRC) division – all are objecting to the amendments made to four different Acts, pertaining to political funding, in the Finance Bill 2017. A year has passed, but none of the departments have taken any action.

Is it because of the unwilling ‘sarkaari babu’? Or is something else at play?

The Quint had earlier reported on the EC’s strongly worded letter to the Law Ministry in May 2017, sharply criticising the amendments to the Finance Bill 2017, calling it a “retrograde step”. The letter states that these changes to the Bill opens up the possibility of setting up shell companies and routing black money.

The four amended Acts are:

  • Section 29C of Representation of the People Act: Contribution through electoral bonds not to be declared to EC.
  • Section 182 of the Companies Act: Removal of the cap on the limit of 7.5% of the average net profits, in the preceding three financial years, on political donation by companies.
  • Section 182 (3) of the Companies Act: Company need not declare their political contribution, paving passage for black money to enter political funding.
  • Section 13A Income-Tax Act: Limit on anonymous cash donations still Rs 20,000 and not Rs 2,000.

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Finance Ministry Supports EC’s Concerns

The RTI reply received by Commodore Lokesh Batra (Retired), accessed by The Quint revealed that the Law Ministry forwarded, on 21 June 2017, the EC’s letter to the Department of Economic Affairs (DEA) which comes under the aegis of the Ministry of Finance.

On 7 March 2018, AK Sinha, the Consultant for FSLRC division wrote an email to different departments in the ministry supporting the EC’s concerns on the amendments.

The FSLRC Division agreed with the views of the Election Commission and had no specific comments to offer.

Red-Tapism Rules, No Solution in Sight

Over a year has passed, but the EC’s letter is still doing the rounds while bureaucrats are passing the buck.

On 5 July 2018, Kuldip Chandra Sharma, the Section Officer of the DEA wrote to the Section Officer of the Budget Division, Amit Garg, saying:

“It is to state that the above matter (EC’s letter) pertains to the Budget Division and hence is transferred to Budget Division for appropriate action as necessary.”

The Under Secretary of the DEA, Ashish Sharma, on 10 July 2018, forwarded the letter to Narendra Kumar, Under Secretary (Coordination), Department of Revenue, saying:

“As the subject matter pertains to Department of Revenue, it is requested that appropriate action as deemed necessary, may please be taken.”

It seems that no one in the Ministry of Finance wants to bell the cat. The crucial amendments to the Finance Bill 2017, which can be used to route black money into political funding and also lead to the creation of shell companies, doesn’t appear to be on the priority list of the ministry.

With the 2019 Lok Sabha Election round the corner, shouldn’t the Modi-led government make political funding more transparent?

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