Bring unrecognised political parties in the tax net
Looking at the number of parties in India, it is easy to suspect that some of them have been floated by national or state parties to park their income from dubious sources, because such parties are not subject to the Election Commission’s scrutinyeditorials Updated: Dec 15, 2016 17:54 IST
The proposal of the Election Commission before the Central Board of Direct Taxes that de-recognised political parties should not be given tax exemption is justified. Under the Income Tax Act, no registered party has to pay tax though all are supposed to file income-tax returns. There are now close to 2,000 political parties in India and there is no reason why a de-recognised party should get this benefit, at a time when there is concern at the proliferation of parties and votes getting split because of non-serious contenders being in the contest. Also if such parties keep getting such a facility, there will be a time when independent candidates will ask for the same or similar privileges. Poll funding has been a source of funnelling black money and cleaning up the poll process is necessary. Looking at the number of parties in India, it is easy to suspect that some of them have been floated by national or state parties to park their income from dubious sources, because such parties are not subject to the Election Commission’s scrutiny.
This is one aspect of the matter. Another important issue that should cause consternation is the undeclared income of many parties, including the BJP and the Congress. According to the data provided by the Association of Democratic Reforms, the Congress has unaccounted income of ₹3,323 crore, or about 83% of its total. For the BJP, the corresponding figures are ₹2,125 crore and 65%. The CPI(M) comes third, followed by other parties. Though this is not in violation of the rules because the legislation stipulates that parties are supposed to declare the sources that have contributed ₹20,000 or more, it is very easy for them to split their sources into many and receive amounts less than ₹20,000 so that they can avoid naming the sources. Here the Election Commission can propose that the source of contributions of ₹1,000 and more must be declared. And to add a layer of protection to this stipulation, it should be made mandatory for all parties not to have more than 15% of undeclared income.
The strange paradox of democracy is that while it is a tool to create an equitable society, its props, of which political parties are the main, sometimes give rise to opposite forces. This is what is happening in South Korea, which transited to democracy a little more than two decades ago. So it is strong institutions such as the Election Commission that can provide a cushion against the forces than can subvert democracy.