Presenting the Budget on February 1, Finance Minister Arun Jaitley announced that political parties will not be allowed to accept donations of more than Rs 2,000 in cash from an individual donor. Earlier, parties could receive cash donations of up to Rs 20,000. On the face of it, the move is aimed at increasing transparency and accountability in donations received by political parties. Lawyer and political activist Prashant Bhushan speaks to Veenu Sandhu about whether this will indeed serve the purpose. Edited excerpts:
Will reducing the limit of cash donation make political funding transparent?
Nothing will come out of this because once the parties don’t have to declare who has given them the cash or how many people have given them the cash, they can declare a consolidated amount. For example, earlier they would say Rs 1,000 crore received in small donations under Rs 20,000. Now they will say Rs 1,000 crore received in small donations under Rs 2,000. So, it is not going to make any difference whether the limit is Rs 20,000 or Rs 2,000 or even Rs 1,000, Rs 500 or Rs 100. The Election Commission had recommended bringing down the limit to Rs 2,000 without understanding that it is not going to make any difference.
On top of this, the whole business of allowing electoral bonds makes it even more anonymous. With this, the names of even those people who donate large amounts, say Rs 1 lakh or Rs 5 lakh or Rs 10 crore, will not be known.
How will electoral bonds make the system more opaque?
The identity of the person who donates money through these bonds does not have to be disclosed by the political party. The party too need not know who the holder of that bond is. This then makes the identity of the donor anonymous, at least to the voter, the citizen. Only the issuing bank might know who the donor is, but that’s about it.
There is also no limit to the amount one can donate through electoral bonds.
So the whole objective is to conceal this from the people. Jaitley’s speech said that there have been complaints that donors are hounded or harassed; therefore, to conceal the identity of these donors, we are introducing these bonds.
Bonds may have to be purchased through cheques or digital accounts, but that will only be known to the banks that have issued those bonds. The bonds themselves will not reveal the identity of the donor. Therefore, when you make a donation to a political party through these bonds, it becomes an anonymous Union Budget 2017 donation so far as that political party is concerned. That’s why it makes the funding more opaque. Even the Election Commission will not come to know the identity of the donor.
Through a new amendment to the Foreign Contribution Regulation Act (FCRA), the government has also allowed foreign companies to donate to political parties.
How will this impact political funding?
This effectively allows political parties to accept foreign funding through subsidiaries of foreign companies in India. This way they have made political funding more opaque and more amenable to foreign influence, while trying to project that they are all for transparency by the gimmick of reducing the limit on cash donations.
These foreign companies can also buy bonds, in which case their identity remains concealed.
What would be an effective alternative?
The government is talking about shifting towards a cashless economy. In that case, all transactions should be through the bank, even for political funding. If they were serious about bringing about transparency, they should have said that there will be no donations whatsoever through cash. In that case, everything, down to the last paisa, would have been accounted for.
It appears the whole objective of this plan – of amending the Act -was to allow foreign funding to political parties. On the one hand, they are targeting NGOs that are doing development work, accusing them of accepting foreign funds by bypassing rules, and on the other they are allowing political parties to take foreign funds. In effect, they are giving foreign companies the power to call the shots in a political party.
There have been repeated demands to bring political parties under the ambit of the Right to Information Act.
The Chief Information Commissioner had said that all political parties should come under the Right to Information Act. Yet, no political party has implemented this, or even agreed to implement it. No political party has appointed a public information commissioner. The Bharatiya Janata Party, which is claiming to be leading from the front, is also conspicuous in not doing this. This government has been the worst offender. It wants political parties to take foreign funds. It wants no transparency in political funding.