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ON JULY 5, 2004, the then Chief Election Commissioner (CEC), T S Krishna Murthy, wrote a 26-page letter to then Prime Minister Manmohan Singh, asking the government to, among other things, bring about “transparency in the matter of collection of funds by the political parties and also about the manner in which those funds are expended by them”. In the same letter, Krishna Murthy also said the provision made in law by the previous A B Vajpayee government in 2003, allowing political parties to only declare contributions received by them in excess of Rs 20,000, was “not sufficient for ensuring transparency and accountability in the financial management of political parties”.
In fact, the issue of opacity in collection of funds and their spending by political parties had been red-flagged by the Election Commission (EC) in 1998 as well. The election regulator had also recommended that auditing of accounts of political parties should be done by auditors approved by the Comptroller and Auditor General (CAG) only, and the audited accounts should be made public.
Speaking to The Sunday Express over 12 years after he wrote the letter, Krishna Murthy said “nothing has changed”. On Friday, Revenue Secretary Hasmukh Adhia announced that political parties depositing old Rs 500 and Rs 1,000 notes in their accounts would be exempt from Income Tax scrutiny, provided the donations were below Rs 20,000 per person. Experts, including former CECs, have often said in the past that red-flagged political funding, ex-CEC says ‘nothing has changed’ many political parties are set up with the sole intention of laundering black money.
“Nothing has changed. The government has done demonetisation. I won’t say it is a bad step; it will have some positive effect. But, unless the issue of electoral reforms, especially political funding, is dealt with on urgent basis, it will have no impact. Electoral reforms recommended from time to time by the EC are essential for safeguarding democracy. This is what I feel,” said Krishna Murthy.
“Just a few of our recommendations have been implemented, that too mostly on directions of the Supreme Court. On making political funding transparent, every government gives the reason that there is no political consensus. This requires only a simple majority in Parliament. Now, we have the government of a party that enjoys majority in the Lok Sabha. Even in Rajya Sabha, some parties, I am sure, will support. Let them do it. How can such an important step not be taken,” said the former Indian Revenue Service (IRS) officer.
Krishna Murthy also favoured elimination of donations from companies to political parties. “Let there be a National Election Fund, and companies can donate to this fund. Expenses of election candidates can be taken from this fund. As for political parties, only their registered members should be allowed to donate to them, and that too with proper receipts. We need a separate law to deal with political parties,” he said.
Jagdeep S Chhokar, founder-trustee, Association for Democratic Reforms (ADR), also emphasised the need to make funding of political parties transparent. “Starting a political party is the best way in this country to siphon off black money without any questions being asked by any government agency. Just look at the number of registered political parties, many of which don’t even put up candidates for elections, and you will understand what I mean,” said Chhokar.
According to sources in the EC, data shows that over 85 per cent of the total donations made to political parties are from unknown sources. Under the existing law, political parties have to disclose the names and addresses of donors — either individuals or organisations — only when the amount exceeds Rs 20,000.
* As per data maintained by ADR, in financial years 2013-14 and 2014-15, the BJP received Rs 673.81 crore and Rs 970.43 crore respectively by way of donations. However, only Rs 170.86 crore and Rs 437.35 crore respectively were from named sources.
* The corresponding figures for the Congress for the same periods are: Rs 598.06 crore (Rs 59.98 crore from named sources) and Rs 593.31 crore (Rs 141.46 crore from named sources).
* The Bahujan Samaj Party, which received donations of Rs 66.91 crore and Rs 111.95 crore in the two fiscals, claimed in communications to the EC that not a single donation was over Rs 20,000.
* The Communist Party of India (Marxist) got Rs 121.87 crore and Rs 123.92 crore during 2013-14 and 2014-15 respectively, but just Rs 2.09 crore and Rs 3.42 crore came from named sources.
According to data made public by the EC for 2015-16, among major political parties, the Aam Aadmi Party (AAP) got donations from 25 persons/ organisations where the amount was above Rs 20,000, while the Trinamool Congress got 13 such donations. The Congress has disclosed names of 915 donors who gave above Rs 20,000, but most of them are party legislators.
Earlier, the Law Commission of India, in its report on electoral reforms, proposed to make it mandatory for political parties to also disclose contributions less than Rs 20,000 if such contributions exceed Rs 20 crore or 20 per cent of the party’s total contributions. But the NDA government is yet to act on the recommendation.