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Transparency in party funding
Making political parties accountable is first step to eliminating corruption
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The Supreme Court's notice to the central government earlier this month on a plea with respect to flaws in the recent amendments to the Foreign Contribution (Regulation) Act (FCRA), 2010 that have opened the doors to unlimited political donations from foreign firms imbues some hope in the tireless battle of ensuring transparency and accountability in political funding. The petition filed by activists had alleged that the FCRA amendment was primarily aimed at protecting the two major national parties - BJP and the Congress. The Delhi high court had earlier held them guilty of taking foreign funding in violation of the FCRA Act three years ago, after which the present amendments were made and introduced in the parliament as a money bill. Not only is the manner of effecting amendments undemocratic owing to the manner in which these amendments were introduced and also for the fact that they sought to overturn a judgement passed by Delhi High Court, they have also opened doors to unlimited political donations from foreign companies, thereby legitimising financial contributions received from foreign sources. Such lack of transparency in funding of political parties opens floodgates of corruption in this country. It is important to begin questioning the logic of such amendments that put a veil of secrecy on the corrupt practices of political parties, without which fight against corruption in this country is impossible. Majority of the funding of political parties comes from big business houses and corporate companies but majority of this is never made public. The business houses get tax exemption for political funding and while this hampers state exchequer, lack of transparency in the way of funding exposes the political-corporate nexus. It is unlikely for business houses to pump in crores of rupees simply out of benevolence without a pre-meditated aim to extract their pound of flesh. Both BJP and Congress are known to spend a lavish amounts on managing their huge party paraphernalia and party units and probably an even bigger amount on electioneering. The BJP's spending in 2014 elections had surpassed all records with huge publicity campaigns and organization of massive rallies and their robust election campaigns have become some kind of extravagant events that incur huge costs. Prime minister Narendra Modi had to rope in professional publicity managers to run his election campaign in run up to Lok Sabha elections but there is nothing known about how the BJP got its funding, who funded them and how is it that the party seeks to pay back its donors.

The amendments to FRCA need to be seen in the light of some other developments in recent years. The old practice of exempting business houses from income tax for 4 percent donation to any political party from their profits was hiked up to 7 percent some years ago. A new law under the present BJP government enables individuals to make large sums of political donations anonymously by purchasing electoral bonds from banks in favour of political parties and has completely eliminated the limits on corporate funding. The FRCA amendment allows any foreign company to donate any amount of money to Indian parties through their subsidiaries operating in India. It ensures that the funds received by political parties since decades cannot be investigated This has not only allowed political parties, especially those in power, to become cash rich and resort to money laundering for the sheer purpose of electoral gains but has also allowed foreign firms to influence the political decisions of the country and its political system, which is already rigged in the favour of the financially powerful. That the BJP's income increased by 81 per cent from Rs. 570 crore in 2015-16 to Rs. 1003 crore in 2016-17 while the income of the Congress party declined by 14 per cent from Rs. 261 crore to Rs. 225 crore shows the manner in which power equations dictate the flow of funds to political parties. The BJP is heavily funded by its overseas Hindutva organizations who control the politics and wealth of temples abroad. Making the foreign funding to political parties opaque allows such organizations to push for their communal agenda as well as allow foreign firms to dictate the political discourse in the country. These are glaring examples of political mal-practices which are at the root of institutionalized corruption in the country. It is not known how the case in the apex court will finally end but that it has recognized the need for making the business of party funding transparent is a good sign. Making political parties accountable is first step to eliminating corruption. But there is still a long way to go.

News Updated at : Tuesday, July 10, 2018
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