The recent announcement in the Union Budget bringing down the amount of donations in cash to political parties from Rs 20,000 to Rs 2,000 is seen as an important step towards political reforms. Earlier, the parties were required neither to pay taxes nor disclose the source of donors for cash donations below Rs 20,000. It is largely believed that political parties received a lot of donations in cash with each contribution being less than Rs 20,000. A recent report by the Association for Democratic Reforms regarding cash donations received by various political parties between 2004-05 and 2014-15 shows the following figures: 85 per cent for Congress, 65 per cent for BJP and 100 per cent for BSP. If parties do not disclose the source of such donations, it raises questions about who is donating and why? The bigger question is can the “reform” measure resolve this problem and bring about transparency in political funding?
The new rules still leave scope for political parties to receive donations in cash, for which they need not make any disclosure. The new laws will only make entries more frequent. A donor would now need to donate in many more installments. Thus scrouge of black money in Indian elections remains. There are various manifestations of the use of black money in Indian elections and mere reduction of the amount of contribution in cash cannot stop the menace. It is a long tunnel and this change cannot even spread so much light by which one could even see the other end. There are many other more serious issues which need to be addressed immediately if the government is serious about electoral reforms. Look at the most obvious loophole in the law, it puts restrictions on how much a candidate can spend on his election campaign, but there is no restriction on the amount his friends or relatives or party can contribute. There is nothing which prevents political parties to bring about this simple change in election laws. The fixing of expenditure limit of the candidate is just an eyewash for ordinary people, it remains only on paper; the rules enable candidates to spend as much as they can.
The problem does not end there. While there are genuine political parties which spend money on campaigns of their candidates, there are “fake political parties” which spend money on election campaigns of Independent candidates. The question is why would such parties spend money on the election campaign of Independents? Actually, many Independent candidates use the platform of fictitious political parties for spending their own money on their election campaigns as there is no restriction on spending by political parties. The Election Commission of India recognises 2045 political parties. The large number is not a problem as various regional political parties represent the social diversity of India. But the suspicion about many such political parties being “fictitious” comes to mind when we see many of them not contesting any election for as long as two decades. At least 255 political parties have not contested any election during the past one decade. After all, the main function of political parties is to contest elections. If registered political parties have not contested any election either since their inception or for decades, it raises the important question about why these parties exist. What could be the motivation for their existence?
Only recently it was discovered that a political party is registered at the address of current home minister Rajnath Singh, while another one is registered at the office of Crime Investigation Department of Jammu and Kashmir. There are many such instances of political parties registered at fake, incorrect or non-functional addresses. This raises doubts in the mind — why then do these parties still exist if they do not contest elections? It can be concluded that they are being used for making use of black money for electoral purposes. The laws in India are simple with regard to the registration of a political party. Any group of people can be registered as a political party by making a simple declaration under Section 29A (5). Clearly the rules regarding registration of political parties need to be made more stringent. New rules regarding deregistration of political parties are also required. The Election Commission has no powers to deregister any political party under any circumstances, the best they could do is delist it. Even the Supreme Court gave a ruling in 2002 to that effect. It observed that deregistration of a political party is a serious matter as it involves divesting the statutory status of a registered political party. So unless there are express of review powers conferred upon the ECI, it has no rights to entertain or even inquire into complaints for de-registering party for having violated the constitutional provisions. The new law as stated in the Budget is a welcome step, but it is still unclear what prevented the government from putting a complete ban on cash donations for political parties rather than only reducing the limit of such donations. It may have created the initial “buzz” but sooner than later we will realise that it will hardly help in bringing about the desired impact.