Editorial: Make political funding transparent

Free and fair elections are not possible without transparency of political funding.

The electoral bond fiasco has proved that they have failed to bring transparency into the election process nor have they contributed in any way to end the flow of black money. While the Supreme Court striking down the electoral bond scheme as unconstitutional and violative of the right to information of citizens is a welcome move, many critics say that we are back to square one as far as political funding is concerned. The question now is how to ensure transparency in political funding, which is one of the key aspects of electoral reforms. Anyone who is familiar with the working of the Indian political system knows well that our elections are funded by money donated by rich businessmen and that often these donations are linked to a contract or a favour. It is not easy to break the symbiotic relationship that exists all over the world between big money and big politics but in countries that have better checks and balances things work better. If India’s political system continues to be reliant on black money it is mostly the fault of our political leaders. If they made it easier for businessmen to work without needing to rely on bribery and corruption, there would be less black money. Free and fair elections are not possible without transparency of political funding.

It is, therefore, necessary that we confront this issue head-on and think of alternatives that can improve the life of Indian democracy. One of the ideas that deserves to be considered is the establishment of a National Election Fund to which corporates and other private entities can donate funds with income tax concessions already available for political donations. That would take away the alleged fear of the corporates of harassment from rival parties. It is true that, before 2018, political funding was largely opaque, 70% of all donations were in cash. But all donations of over Rs 20,000 were reported to the EC on whose verification they were entitled to income tax rebate. After the introduction of electoral bonds, there was a total shroud of secrecy about the donors and recipients, leading to the allegations of quid pro quo. Corruption in elections has been a subject of debate for decades. Many parliamentarians have offered different solutions. In 1999, the Indrajit Gupta committee recommended partial public funding of political parties, subject to internal democracy within them. Since inner party democracy has remained a pipe dream, the reform could not take off. According to a study in 2012 titled ‘Political Finance Regulations Around the World’ conducted by the International Institute for Democracy and Electoral Assistance, an official inter-country organisation in Stockholm of which India is a founding member, of the 180 countries analysed, 71 nations provide state funds to political parties based on the number of votes they secure. There must be a wider national debate on this proposal.

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