Poll funding: EC asks Govt to scrap new secrecy norms

Arun Jaitley had announced the introduction of electoral bonds in his Budget speech this year.

Written by Ritika Chopra | New Delhi | Updated: June 1, 2017 5:47 am
election commission, arun jaitley The Parliament, in the Budget Session, also accepted the omission of the first proviso in Section 182 of the Companies Act 2013, which consequently removed limit on corporate donations to political parties.

The Election Commission (EC) has written to the Law Ministry objecting to the recent amendments in the Representation of the People (RP) Act and the Companies Act, which exempt political parties from disclosing donations received through electoral bonds and remove cap on corporate contribution to political parties, respectively.

In a letter written to Law Secretary Suresh Chandra last week, the Commission has asked the government to “reconsider” and “modify” the above amendments as they discourage transparency in political donation.The poll panel is also learnt to be upset about the government bringing amendments to the RP Act in Parliament through a Money Bill without consulting the EC. The letter, however, makes no mention of that.

Under Section 29 (c) of the RP Act, political parties have to file contribution reports complete with details of donors for any contribution above Rs 20,000. This was amended in the Budget session of Parliament this year to introduce a new proviso and explanation that exempt political parties from disclosing donations received from electoral bonds, even if it is above the prescribed limit.

Asking the government to withdraw the new proviso, the EC wrote, “In a situation where the contribution received through electoral bonds are not reported, on perusal of the contribution report of political parties, it cannot be ascertained whether the political party has taken any donation in violation of provision under Section 29(b) of the RP Act which prohibits the political parties from taking donations from government companies and foreign sources.”

The Finance Minister had announced the introduction of electoral bonds in his Budget speech this year. These bonds will be issued by a notified bank for specified denominations, which a donor can buy and gift to a registered political party. The identity of the donor will not be known to the receiver.

The Parliament, in the Budget Session, also accepted the omission of the first proviso in Section 182 of the Companies Act 2013, which consequently removed limit on corporate donations to political parties. Earlier, a company could contribute not more than 7.5 per cent of its net profit over last three years.

On this change, the EC’s letter states, “This opens up the possibility of shell companies being set up for the sole purpose of making donations to political parties with no business of consequence…

“The Commission is of the view that the earlier provisions ensured that only profitable companies with proven track record could provide donations to political parties and accordingly it is recommended that the provision may be re-introduced.”

Lastly, the EC has called for strengthening of Section 182(3) of the Companies Act, which has been diluted to exempt companies from disclosing party-wise details of their political donations in their profit and loss statement. Under the changed provision, companies only have provide the total amount contributed. The Commission wants the government to reinstate the obligation to disclose party-wise details.

The poll panel first articulated its reservations regarding the above changes at a press conference held in Chandigarh on April 29 where Chief Election Commissioner Nasim Zaidi told reporters that scrapping the limit on corporate contribution to political parties, was “basically hitting” transparency in funding.

This month, in its written response to the Standing Committee on Personnel, Public Grievances, Law and Justice, headed by Anand Sharma (Congress), EC described the move to issue electoral bonds a “retrograde step” as it would “compromise transparency” in political funding.

EC’s letter to the Law Secretary last week is its first official communication with the government on the amendments.

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    ASHOK KUMAR
    Jun 1, 2017 at 8:56 pm
    Vijay Mallya was allowed to run from the country under the protection of CBI having 10000 crore of public debt to his name. The reasons are obvious, both Congress and BJP helped him . The same is the case of Lalit Modi.
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      ASHOK KUMAR
      Jun 1, 2017 at 8:53 pm
      By now, 125 crore Indians have come to know the real face of Modi. Election Commission should straight away file pe ion in Supreme Court to declare this amended law as null and void as it hits the very concept of democracy ,which Modi wants to run through dubious means with the help of all corrupt political parties.
      Reply
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        cheatersanghi
        Jun 1, 2017 at 3:13 pm
        looks like modi suppoprts black money and donations unaccounted wealth...if modi has guts then again demonitize high value currency like 2000 and 500 before 2019 election..dhokebaaz budda
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          Mukesh Goswami
          Jun 1, 2017 at 2:47 pm
          EXCELLENT STEP TAKEN BY EC FINALLY.. MODI JAITLEY HAD BEEN BULLDOZING THE PARLIAMENT AND COUNTRY AND TAKEING EVERYTHING FOR GRANTED AND TAKING UNETHICAL ROUTES FOR GETTING AROUND THE SYSTEM LIKE MONEY BILLS.. THERE SHOULD BE NO CASH POLITICAL FUNDING.. NO MINISTER INCLUDING PM, MP, MLA, MLC OR CORPORATOR SHOULD BE ALLOWED TO HOLD ANY POLITICAL RALLY AT GOVT COST.. WHO IS PAYING FOR MODI'S RALLIES.. IS ALL PAYMENT BY CHEQUE OR DIGITAL MODE ?? LET MODI ANNOUNCE THAT HE HAS NEVER USED BLACK MONEY..
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            l s
            Jun 1, 2017 at 2:40 pm
            Poll funding should be transparent. This is the real area where black money comes from and where it goes. Every one thousand and more money should be accounted. But, neither this govt nor any govt will do this. This will be their own funeral. Supreme should act in this matter as it has acted in many more smaller matters. Will the supreme court act ??????
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              Abdul
              Jun 1, 2017 at 1:54 pm
              The large donors are big businessmen. They do not invest in anything if there is no return. They give 100 crores and take back 10000 crores from the people. Exactly the companies grown from ground to top of the ladder in one generation. Beside the organisation like patanjali who benefited from from govt. invested in the govt and now reaping the fruit. These people will again invest and take the ordinary tax payers and farmers money through ordinance and price hike from the govt. All companies whether they are private, govt, NGOs, or religious places should be banned from donating funds to political parties and contribute the govts social welfare scheme.
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                Bipin Bhardwaj
                Jun 1, 2017 at 1:44 pm
                The future govt will be the stooge of the corporate houses, big money bags, contractors, ders, black marketeers and criminals. EC has exposed the Govt for demolishing whatever democratic process there is by legally enacting taking over the electoral process by the criminal mafia, the corporate houses, it is open of the political leaders with black money. The door for black money, corruption , frauds has been widely opened. Govt has made wide door open encouraging corrupt practices, and has made it legal. This also shows the dishonesty and conspiratorial agenda of the Govt so that it can negate the majority of the people almost 99.9 will have no say in the political process.
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                  sumaguru
                  Jun 1, 2017 at 12:57 pm
                  The issue here is keeping the donor name under wraps to avoid victimisation by other party when in or coming into power. The electoral binds itself are obtained by paying through cheque at designed branches (not possible with cash) thus ensuring the payments are in white. I do not see n issue here -- yes just that names are not disclosed as is the acse when some sensitive reporting is done name is withheld or changed to protect iden y. As long as the money is white and accounted for it should not be an issue.
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                    Punekar
                    Jun 1, 2017 at 11:24 pm
                    A most asinine comment. The question here is not black or white money. It is letting the voters know who is sponsoring the electoral campaigns of a Party. Even if huge quan y of white money is used to buy bonds one does not know to which Party the bonds are gifted. The country should know if a company who has bankrolled a Political Party becomes sole beneficiaries of Government policies later on when it comes to power. This is corruption of the highest order.
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