There’s a liquidity crisis in the country that’s unlikely to go away anytime soon. But will the quota on cash withdrawal apply to parties in the fray for assembly polls early next year?
The law, as it exists, places no bar on party expenditure. The ceiling is only for candidates, not for leaders listed as star campaigners — 40 for recognised and 20 for registered parties — with the Election Commission.
Travel for electioneering by them constitutes a major chunk of the party expenditure by way of hiring choppers, organising public meetings, printing and distributing election material besides media advertising. Ground for such publicity is promotion of party symbols and faces barring candidates.
The money the candidates spend — Rs 40 lakh and Rs 70 lakh respectively for assembly and parliamentary polls — is in addition to the party expenditure. Officials who oversaw the 2009 and 2014 general elections say the outflows under the ‘party head’ were largely from donations below Rs 20,000 that invariably are held in cash and not required to be reported to tax authorities and the poll panel.
That happens despite the EC guidelines that parties shouldn’t keep cash beyond what they require for a fortnight to three weeks. Nearly 80% of the estimated Rs 4,000- Rs 5,000 crore the parties spent in 2014, said an official, were shown against small donations that “aren’t on the radar”.
Not a wee bit surprising then that political consensus has been on ‘stalling’ rather than pushing reforms. Reporting requirements for funding below and above Rs 20,000 were inadequate and weak, said another official. “It’s a travesty of the law in practice.”
A question I bounced off former CECs and EC officials was: must an attempt not be made to make parties agree to a one-off ceiling on expenses in view of the cash crunch? They found the idea worth a try but weren’t sanguine about an agreement happening. The reason: the guidelines the EC issued in 2014 for ‘transparency in party funds and election expenditure’ had run into a political wall.
Under the guidelines that aren’t binding, parties are expected to deposit their funds in banks. They cannot also pay in excess of Rs 20,000 in cash to any person or company, except at locations lacking banking facilities.
But in practice, cash is hoarded. “When you say they stock cash, they say they’re keeping cash received in small donations,” remarked an EC official who engaged with parties on the issue. He’s convinced that short of robust legislation, the menace shall continue.
That leaves hanging the question: who’d bell the cat? Not ostensibly the law makers. But perhaps the judiciary in case the EC breaks its tradition of not moving the courts suo motu.
At the core of the poll panel’s institutional memory are reports by observers they depute during elections. But a former CEC wondered: “If we use them in courts, would officials on poll duties ever furnish honest accounts of what they see?”
A better option would be take the NOTA route where a PIL secured for the electorate the right to reject all candidates, said an official “We must create conditions to encourage public spirited people to seek directions from the judiciary on party expenses.”