The Election Commission has written to the union law ministry asking for changes to the Representation of the People Act. The proposed changes aim to lower the maximum permissible cash contribution to political parties to Rs 2,000, and also cap cash donations at 20% or a maximum of Rs 20 crore. The aim behind the proposals is to clean up electoral funding.
The aim is welcome and deserves support. However, the proposed measures are inadequate to achieve the laudable goal EC has set for itself.
EC should propose a complete ban on cash transactions in political funding. There’s no need for it any longer as access to formal banking is widespread. To illustrate, the World Bank estimated that 78% of all adult Indians had bank accounts in 2021.
Transparency is realised when there is a clear trail. In order to realise this goal, EC should also seek a ban on funding through the medium of electoral bonds. These are promissory notes payable to the bearer of bonds. It allows for the concealment of a donor’s identity and also exempts political parties from disclosure requirements. From a voter’s standpoint, this is the most dangerous method of political funding as it makes public policy vulnerable to capture by vested interests.
In the pursuit of its laudable goal, EC should seek complete transparency in political funding and also disclose the details on its web site. Political parties are exempt from income tax in order to strengthen electoral democracy. Complete transparency in political funding will make it even more resilient.
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