The colour of polls

PM’s move against black money prepares the ground for reforms of electoral finance.

Written by S Y Quraishi | Published: December 8, 2016 12:02 am
demonetisation, pm modi, demonetisation policy, modi demonetisation news, Election Commission of India, ECI, black money indian economy, black money in elections, Election Commission of India, UP polls, unaccounted money in election, money spend in elections, india news The government’s rejection of the ECI’s proposal to give it permanent powers to cancel elections on credible evidence of abuse of money was indeed a surprise as it goes against the prime minister’s avowed war against black money.

A series of new and dramatic developments have brought centre-stage the long discussed — and long evaded — subject of electoral reforms.

It all started with the prime minister calling for the need for simultaneous elections in view of the overwhelming costs and dislocations of normal life. As the debate on this issue was still hotting up, he came up with the surprise announcement of demonetisation of currency notes of Rs 1,000 and Rs 500 denominations. While his stated objective was to root out the monster of black money from the economy, many critics saw in it an attempt to turn into junk the sackfuls of currency notes with the Opposition parties. I, for one, find it a great move as far as the role of black money in elections is concerned.

All political parties use black money to finance their campaigns and to bribe voters. Earlier, it used to be just a few days before the elections, but ever since the Election Commission of India (ECI) put together expenditure control mechanisms in 2010, followed by a crackdown on unaccounted money as soon as the model code comes into play, political parties changed their strategy and advanced the activity by a few weeks. Since elections to five state assemblies are round the corner, this is the time when the money would have been moving. The exact impact, however, would be known during and after the elections.

Some subsequent developments, even if not originally intended, also have a bearing on electoral reforms. After demonetisation threw up huge logistical challenges, the government’s campaigns to promote e-banking, e-wallet etc have come on everybody’s lips. This, again, is a positive development. When even a rickshaw puller or vegetable seller is told to stop cash transactions, the exemption of donations to political parties below Rs 20,000 from the “by cheque only” regulation must also be dispensed with straight away. This will take care of the non-transparency of 80 per cent of political funding which all political parties have shown as cash donations. This amounts to an average Rs 1,000 crore per year.

The third development is the PM’s directive to his party legislators to disclose all their bank transactions since November 8. Many questions were raised. My reaction is that instead of criticising it and suggesting what the PM could have done better, why not welcome it as a first positive step towards the financial transparency of politicians? Another great move of the government is to pass an Act to curb benami property deals and the subsequent crackdown. This should also have a salutary effect on the black money in elections.

In the context of these developments, one report came as a shock. This was the law ministry rejecting the ECI’s proposal to give it permanent legal powers to countermand polls on credible evidence of the use of black money.

The ECI has been deeply concerned about the use of black money in elections. It has repeatedly written to the government, suggesting electoral reforms for the last two decades. On its part, the ECI has been doing its best. The setting up of the expenditure monitoring division in 2010 in the commission was a milestone in its efforts to challenge the abuse of money in elections. Stringent guidelines, and strict enforcement, led to the seizure of hundreds of crores of rupees and put some fear of god in the hearts of the profligate politicians. Our proactive steps led to some landmark achievements, including the unseating and disqualification of a sitting MLA, Umlesh Yadav, in UP for improper declaration of election expenses and paid news. Another was the countermanding of two elections to the Rajya Sabha in Jharkhand in 2012 to stop the “horse trading” that had become rampant in many Rajya Sabha elections. The Jharkhand High Court upheld this as the most decisive step against corruption and even fined the petitioner Rs 1 lakh. Recently, the ECI took an unprecedented step to cancel elections to two Tamil Nadu assembly seats, namely Aravakurichi and Thanjavur.

In this context, the government’s rejection a week ago — the second in two months — of the ECI’s proposal to give it permanent powers to cancel elections on credible evidence of abuse of money was indeed a surprise as it goes against the prime minister’s avowed war against black money. My charitable interpretation is that this rejection had actually come without the knowledge of the PM. I am sanguine that if the ECI refers the case back to the law ministry, they would not have the moral authority to reject it now.

The most explicit development is the PM’s expression of concern, in his address to the party MPs on the eve of the winter session of Parliament, about the need for electoral reform. It seems the time is ripe for it. He should immediately review all the proposals of the ECI.

What reforms are we looking for? I recapitulate below, briefly, just the political finance reforms: One, prescribe a ceiling for political parties’ expenditure, like that for the candidates. Two, consider state funding of political parties (not elections) with independent audit and a complete ban on private donations. Three, enforce internal democracy and transparency in the working of the political parties. Bring them under the RTI. Four, set up an independent national election fund where all tax-free donations could be made. It could be operated by the ECI or any other independent body.

Five, accept the ECI’s proposal to legally empower it to cancel elections where credible evidence of abuse of money has been found. Six, debar persons against whom cases of heinous offences are pending in courts from contesting elections. Seven, empower the ECI to de-register those political parties which have not contested any election for 10 years and yet benefited from tax exemptions. Eight, make paid news an electoral offence with two years’ imprisonment by declaring it a “corrupt practice” (Sec 100 RP Act) and “undue influence” (Sec 123(2)).

In December 2015, the ECI had organised a conference of SAARC countries in collaboration with the International Institute of Democracy and Electoral Assistance-IDEA on the scourge of money power in elections. The conference adopted a historic New Delhi Declaration laying down the guiding principles of transparency of electoral finance. Member countries of the region and IDEA are trying to get this declaration widely accepted. India, considered a gold standard of elections, has a moral responsibility to lead from the front. Over to you, prime minister!

The writer is former CEC and author of ‘An Undocumented Wonder — The Making of the Great Indian Election’.

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