NEWS

Here's How Modi Government Dismantled Your Right To Transparent Political Financing

Amendments to the Finance Bill 2017 have removed all protections in this regard.

23/03/2017 6:31 PM IST | Updated 23/03/2017 7:02 PM IST
Anindito Mukherjee / Reuters

There is a lot to be concerned about with the passage of the 2017 Finance Bill by the Lok Sabha, with its shockingly long list of amendments, starting with the creeping Aadhaar-isation of all manner of citizen services. But there's one particular area in which the gap between the transparency talk and walk of this government is egregiously vast--political funding.

The amendments to the Bill came in waves over days, catching even MPs off guard. It's worth wading through them to see how systematically the government dismantled citizen protections that provide some oversight of the murky world of political finance.

The Finance Bill amendments do three things: one, they amend Section 182 of the Companies Act to remove all caps on the amount companies can donate to political parties (prior to the amendment, this stood at 7.5% of the average net profits of the company for the last three years, to prevent companies being set up as fronts to channel money into political parties--that protection is also now gone). Two, they free the company from mandatory disclosure of donations made by it to political parties in its profit and loss books--the company no longer needs to say whom it donated to.

Ideally, the Representation of the People Act whose Section 29C requires all political parties to declare the names of all donors above Rs 20,000 should still protect us as citizens. We should also still be able to rely on Section 13A of the Income Tax Act which requires political parties seeking tax exemptions to declare the names of all donors over Rs 20,000. In fact, following Finance Minister Arun Jaitley's announcement in his budget speech that the limit on anonymous cash donations was being lowered to Rs 2,000, we should have been moving towards greater transparency.

But here's how the government systematically dismantled these protections on disclosure available to citizens. Amendment No. 11 lowers the cash limit to Rs 2,000 but does not also move the disclosure norm down to all donations of more than Rs 2,000. And then - Amendment No. 136 to the Finance Bill inserts the following words after Section 29C of the RPA: "'Provided that nothing contained in this sub-section shall apply to the contributions received by way of an electoral bond." And what does the government have to say about electoral bonds? "[A]ny contributions received by way of electoral bond shall be excluded from reporting" as per new amendments to the Section 13A of the Income Tax Act.

One by one, the government systematically closed every possible loophole that might allow us to access information about big donors to political parties, without once feeling the need to even make the argument to the public that there was any public interest behind what it was doing.

For those campaigning for political finance reform, this must feel like the final nail in the coffin. The problem thus far was the large number of cash donations under Rs 20,000 from anonymous donors that parties were reporting, but what the government has done is close the door for relatively small anonymous donors and open the door for any size of anonymous donations through electoral bonds. Simultaneously, the government has shown no interest in the other two massive areas of concern--the continuing disregard of national political parties for the Central Information Commission's ruling on opening them up to the Right To Information Act, and the blatant flouting of foreign funding rules by the Congress and the BJP.

So from April 1 this year, we could potentially have absolutely no information about who is donating to our political parties--surely not the direction citizens expected political financing to go in after Jaitley's budget speech declaration promising to "clean the country from the evils of corruption, black money and non-transparent political funding".

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