The Electoral Commission wrote to the union code asking for a change to the Representation of the People Act. The proposed changes aim to reduce the maximum allowed cash contribution for political parties to Rs 2,000, while also limiting cash contributions to 20% or a maximum of 20 Rs crore. The purpose behind the proposals is to clean up election funding.
Purpose is welcome and worthy of support. However, the proposed measures are not sufficient to achieve the commendable goal set forth by the EC.
The EC should propose a complete ban on cash transactions in political funding. It was not necessary anymore because access to formal banking was widespread. To illustrate, the World Bank estimates that 78% of all Indian adults have a bank account by 2021.
Transparency is achieved when there is a clear trace. To this end, the EC should also seek a moratorium on funding through the means of electoral bonds. These are promissory notes payable to the bearer of the bond. It allows for the concealment of a donor’s identity and also exempts political parties from requiring disclosure. From the electorate’s point of view, this is the most dangerous method of political financing because it makes public policy vulnerable to vested interests.
In pursuit of its laudable goal, the EC should seek complete transparency in political funding and disclose details on its website as well. Political parties are exempt from income taxes to promote electoral democracy. Full transparency in political funding would make it more flexible.
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