Cash donation limit, bonds to reform polls fail to impress experts, parties | union-budget | Hindustan Times
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Cash donation limit, bonds to reform polls fail to impress experts, parties

union budget Updated: Feb 02, 2017 22:06 IST
Smriti Kak Ramachandran
Poll reforms

People campaigning for the upcoming Punjab assembly election in Jalandhar on February 1, 2017. (Sikander Singh Chopra / HT Photo )

Introduction of electoral bonds and limiting cash donations to political parties cannot be dubbed as reform measure to check the use of black money in the poll process, experts point out.

A day after the government lowered thelimit for cash donation to Rs 2,000--one-tenth of the existing limit--and announced the introduction of electoral bonds, experts underlined the need for paving the way for big ticket reforms such as setting up of a national election fund that will be managed by the election commission and make it mandatory to identify donors.

In his budget speech on Wednesday, finance minister Arun Jaitley said the government has proposed an amendment to the RBI act and will draw up a scheme for electoral bonds, to be sold from authorised banks against cheques and digital payments. These shall be redeemable only in the designated account of a registered political party and within a time frame, he said.

The EC has repeatedly underlined that anonymous donation to political parties raises concerns of illegal money finding its way into the political system. Even Prime Minister Narendra Modi favoured discussion and change in fund raising process of political parties during the all-party meeting at the beginning of winter session of Parliament.

Former chief election commissioner, TS Krishnamurthy, however, said instead of introducing bonds, the government should consider allowing the EC to collect money for sponsoring elections. All political parties could draw funds from this common pool to contest elections, he said.

“There is no way to check if the bond purchased by an individual has not been bought and sold in the market several times over, before it is cashed by a political party,” he told HT.

Read | Budget 2016: The move towards transparent funding is the first step towards electoral reform

The EC should consider setting up of a national election fund to check the use of illegal money, he suggested and added, “all corporate who donate to this funds could get a 100% tax waiver.”

Capping the cash donations at Rs 2,000, an idea mooted by the EC, cannot be seen as a reform, Krishnamurthy said. “I don’t know why the EC even recommended it. They should insist on a PAN card number of all donors, irrespective of the amount given,” he said.

There is no way to check if the bond purchased by an individual has not been bought and sold in the market several times over, before it is cashed by a political party
TS Krishnamurthy, former CEC

The suggestion of a fund has also been made by the Indrajit Gupta Committee, which proposed state funding to offer a fair playing field for parties with less money. The Congress too has backed the demand for the creation of a national electoral fund.

‘Good step, but not adequate’

Another former CEC, HS Brahma said lowering the cash limit is a “good step”, but “not adequate”. He pushed for educating voters as the next step.

Election watchdog Association for Democratic Reforms (ADR), also found the two measures falling short of ushering in reforms. “The Budget does not promise scrutiny of income declared by political parties from various sources and the corresponding measures of penalisation without which the reforms will remain incomplete. Unless scrutiny of accounts of political parties is taken up by a body approved by Comptroller and Auditor General (CAG) or ECI, the parties’ declared income is unlikely to reflect their true income,” it said.

On the issue of disclosure of donors it said, even if the donations are made by cheque or digital transfer, unless their complete information is available for audit scrutiny, the sources of donations below Rs 2,000 to political parties will continue to stay hidden.

Political parties too were sceptical of the announcements.

Trinamool Congress described the move to limit cash donations as “meaningless”.

“Now there will be more donations under the Rs 2,000 category,” Saugata Roy told Hindustan Times. He also said the proposed bonds are not a foolproof method to check graft.

CPM’s Mohammad Salim said that in order to ensure electoral reforms the EC will have to keep tabs on the collection and spending by political parties instead of focusing on candidates. “Introducing bonds will only mean donation in another mode. Corporate donations to parties needs to be stopped; that would be an election reform,” he said.