Electoral System Reforms – ADR Findings

The data released by Association of Democratic Rights (ADR) and National Election Watch over funding of political parties between 2004-05 and 2014-15 has shown that there needs stricter laws to inject transparency into funding of political parties and make them accountable to the Election Commission of India (ECI) and the Income Tax (IT) authorities.

The highlights of the findings by Association of Democratic Rights (ADR) are:

• India’s national and state parties have received an whooping Rs.11,367 crore during the period under analysis. Out of this, as much as Rs. 7,833 crore came from unknown sources.
• While the income of national parties increased 313% from Rs.274 crore to Rs. 1,131 crore between 2004-05 and 2014-15, the income of state parties increased 652% from Rs. 37 crore to Rs. 281 crore.

From the above data, it is amply clear that political funding is the main channel for corruption and generation of black money in the country.

Basis for funding from unknown sources

Currently, as per the law, political parties need not declare the identity of those persons who donates less than Rs. 20,000 to them. This loophole has been exploited by the political parties. So in total as much as 71% of funds collected by political parties have been declared to be sourced from unknown sources. These money are expected to be earned illicitly by the donors. Often, the donations are also made by business houses and industrialists either as an expression of gratitude or in the hope of securing Government contracts.

Way forward

If the political system needs to be cleaned then the election law has to be amended so as to put an end to anonymous donations. The ECI has suggested amending the law to put a cap on upper limit for anonymous donations at Rs.2000. But again, this may also be used as a loophole by the political parties. In addition, stricter norms have to be put in place for the political parties for maintaining their accounts and audit of accounts. The menace of corruption and black money can be tackled only if these issues are addressed honestly.