1. Black money in politics: Despite PM Narendra Modi highlighting need for change, lack of progress is unfortunate

Black money in politics: Despite PM Narendra Modi highlighting need for change, lack of progress is unfortunate

Though the role of black money in politics is well-known, and the prime minister has also spoken of the need to fix this in the post-demonetisation period, the lack of progress on this front is unfortunate.

By: | New Delhi | Published: January 30, 2017 6:06 AM
As the Association of Democratic Reforms (ADR) has pointed out recently, over 69% of the income declared by both national and regional parties between 2004-04 and 2014-15 was from unknown sources (Reuters) As the Association of Democratic Reforms (ADR) has pointed out recently, over 69% of the income declared by both national and regional parties between 2004-04 and 2014-15 was from unknown sources (Reuters)

Though the role of black money in politics is well-known, and the prime minister has also spoken of the need to fix this in the post-demonetisation period, the lack of progress on this front is unfortunate. As the Association of Democratic Reforms (ADR) has pointed out recently, over 69% of the income declared by both national and regional parties between 2004-04 and 2014-15 was from unknown sources—as per the rules, parties do not have to declare the names of donors if the amount is below R20,000. More important, 41 of 52 regional parties had not filed a return for at least one financial year in the last eleven years; 12 of them had never filed a contribution report since 2004-05. Further, while the growth of revenue from unknown sources was 313% for the six national parties, it was 652% for the regional ones. Even among those, BSP which showed no income from known sources, saw a growth of 2,057% over the 11-year period. It is not clear if this will be fixed with the Election Commission’s (EC) suggestion that the R20,000 limit be lowered to R2,000 since unscrupulous political parties can just as well claim the donations were lower than that amount. If private citizens are to be pushed away from cash, and a committee even recommended cash transactions above a certain level, be taxed, it is chicanery to allow political parties to get away with not disclosing the sources of their incomes.

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Also, only the naïve would believe all political parties, together, have accumulated only R11,367 crore since 2004-05 since their expenditures on elections and in the period between them are believed to be several times this amount—if elections in India were so cheap, and political parties required such little funding, it is difficult to believe corruption would be as endemic as it is, or require something as drastic as demonetisation to cure. What is needed is more realistic limits on expenditure and removing of current loopholes—the EC restricts spending to R70 lakh per candidate for those contesting Lok Sabha elections, but there is no restriction on political parties or the candidate’s friends spending more than this. It is only when expenditure is monitored strictly, and parties asked to explain where the money came from, that there will be less black money in politics. This is something the prime minister has to drive personally—leaving it to ‘political consensus’ would suggest he is not serious about applying the same yardstick to political parties that is being used for individuals.

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