For the first time, Union Finance Minister Arun Jaitley promised transparency and accountability in political funding in his union budget proposals. But, the premier election watchdog Association for Democratic Reforms (ADR) deplores that he does not answer questions on how it would be implemented at the ground level nor has it promised implementation of related reforms proposed by the Election Commission of India (ECI) and Law Commission of India. It also felt that the Budget fails to address the issue of transparency, disclosure and penalties of political parties.
Moreover, the proposed reforms are inconsequential as the political funding will continue to remain opaque. The Budget does not promise scrutiny of income declared by political parties from various sources and the corresponding measures of penalization without which the reforms will remain incomplete.
The Budget does not propose that the details of all donors who donate above Rs 2000 be made available to the Income Tax department and/or an external body auditing the accounts of political parties.
The political parties were “entitled to receive donations in cheque or digital mode” even before it was proposed in the Union Budget and hence had the option of accepting donations in only such forms that can traced to a donor.
The political parties will be required to file their return of income within the prescribed time and that only such parties which fulfil the above conditions would enjoy 100% tax exemption. It should be noted that the Proviso to Section 13A of the IT Act, 1961 already provides such provision and re-iterating an already existing rule of law does not add anything new to the proposed electoral reforms.
For complete transparency, apart from digitization of donations, ADR suggests that the Government of India should also take immediate steps to implement other electoral and political reforms proposed by the ECI and the Law Commission. The National and Regional Parties should, ideally, led by example by filing complete and correct statements of donations to the ECI well in time for public scrutiny so as to encourage financial transparency.
They must also provide all information on their finances under the Right to Information Act. This will go a long way in strengthening political parties, elections and democracy, it added.
