Structure, organization and functioning of the Executive and the Judiciary Ministries and Departments of the Government; pressure groups and formal/informal associations and their role in the Polity.
The ECI declared its decision to delist 200 political parties that had not contested any election since 2005 and decided to inform Central Board of Direct Taxes about it. This will disallow tax benefits to them. ECI has the mandate to register a political party but, it lacks power under electoral laws to deregister any party. ECI used its powers under Article 324 of the Constitution to delist parties for being dormant and not contesting elections for a long time, as its demand to get power to deregister a party is pending with the Law Ministry. Thus the context in which the ECI has been saying for some time that it needs to be equipped to deal with issues of delisting political parties to avoid such long procedures.
Currently, there are over 1780 registered, but unrecognised political parties in the country. Also, there are seven national parties and 58 state parties.
Clearly this is a follow up of what PM had discussed about the demonetisation drive to unearth the black money along with efforts to fight menace of terrorism as well as scourge of poverty. This is significant as PM had requested ECI to go through the entire gamut of issues connected with funding of political parties because it raised a huge controversy that one of the main fountains of spreading black money is the expenditure that is done by political parties, especially at the time of elections.
Delisting political parties
ECI suspects that many of these parties could be nothing but money laundering operations.
Most of the parties exist on papers to help people convert their black money into white by accepting donations.
Therefore there are many parties who do not even bother filing income tax returns, and if they do, they never send a copy to ECI which is mandatory.
If the effort is to really contain spread of black money and more so because elections do play big part in generation and spending of black money, it is a small way forward and still a long way to go.
ECI hopes that CBDT will look into financial affairs of these parties as they are no more eligible for any tax benefits that are given to it.
The electoral reforms and funding of political parties has begun long ago since 1970s beginning with the Tarkunde committee initiated by JP Narayan followed by Dinesh Goswami committee and Inderjeet Gupta Committee. All of them did not want public funding. If there is a public funding then it should be very limited in the context of providing facility.
The problem with political parties is that they are extra constitutional groups. No constitution and no democracy can work without political parties but then it has no constitutional sanction to receive money. Thus, dealing with the funding of these political parties or organisation is difficult task.
ECI had two options
Reduction in number of political partieswhich remained dormant for a very long time. However, it did not find favour with any of recognised parties.
Deregistering is a tricky problem. There exists a National Press, various small presses and also some of the presses have no circulation. Lot of things are registered but they never come out regularly and they close without any announcement. The political parties are also in this kind of situation. To take up any punitive action against the entire system is not exactly easy. Parties grow and decay. So the important thing is to reform political culture by bringing all political parties under RTI. There should be proper auditing which is available to electorate. Intermediary risks can always be taken. In that context, if the parties exist only on paper, atleast some action is taken against them.
Political funding– if new political parties are formed and they operate in a system then how to work out funding of all political parties. So there rises a question of inequality.
Law commission has prepared report on issue of state funding of election. It has gone indepth with various aspect connected with it. It has also expressed that it is not in favour of state funding of election on one side and on other side said state funding of election is pretty good to contain rising cost of conducting election. It has suggested shifting their strategy from vote buying to programmable politics. But these are idealistic proposals which have little meaning. State funding doesn’t work satisfactorily even in the world. In US, half of the states have state funding but doesn’t work well because limit of expenditure is not set for political parties.
On ground, fixing limit and sticking to it doesn’t really work.
Another step taken in this direction is reduction of anonymous contribution from Rs. 20000 to Rs. 2000. Some might say that in age of digitisation, anonymous donations should cease. But the point is if political parties are willing to accept it and also that if there are genuine small donors who will like to remain anonymous, it is their right. In a political culture of democracy, a balance is required and if it is worked out well, some progress can be made. If a person wants to donate money to religious institutions, he has the right to be anonymous. Then treating political parties differently by removing anonymous donation factor is not legible.
There is an overall architecture provided by ECI on how much a candidate can spend in a particular constituency during elections. But the political parties are free to spend any amount. To have a check on funding, a practical reform that can be initiated – Suppose A party fields 100 candidates and limit on spending is 10rs/candidate. Maximum amount spent by the party should be Rs. 1000. This will allow ECI to know where the additional funds are coming from and going to. However, this kind of things have not yet been evolved.
FCRA allows political parties to accept donation from foreign entities, including companies. Lot of contribution from foreign individuals and companies have come into lot of questions of late. It is felt that there are many loopholes in the existing rules which is sought to be exploited. The strictness of law and no political party should get decisive advantage in this situation is important. Here ECI has to be strict about procedure followed and if foreign exchange is available, then it is easier to detect.
Ultimately it comes to public morality, awareness and intention of political parties which is extra constitutional in nature. There needs to be certain flexibility in dealing with problems of black money. So, the best option is to have proper audit which tracks the money trail of political parties.
Connecting the dots:
What are the various electoral reforms which need to be implemented at the earliest? Enumerate