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AIR spotlight summary on “Election Commissions proposal against 200 nonexistent political parties”.

Election Commissions proposal against 200 nonexistent political parties


The Election Commission of India (ECI) is proposing to Central Board of Direct Taxes (CBDT) to delist 200 political parties. Election Commission has been saying from quite some time that it needs to be equipped and given more teeth to deal with the issue of delisting political parties. One of the main fountains of spreading black money is the expenditure of political parties especially during the time of elections.

Electoral Reforms in India

  • The electoral reforms and the funding of the political parties have its beginning in Tarkunde Committee initiated by Jaya Prakash Narayan and then it was Dinesh Goswami Committee and Indrajit Gupta committee. All these committees did not want public funding and there should be a total funding for political parties. Even if there is public funding it should be a limited funding.

Funding Political Parties

  • Political parties are extra constitutional bodies. No constitution and democracy can work without political parties but they do not have constitutional sanction. So dealing with political party funding is quite a difficult task, it depends on the political culture and also the behaviour of the political parties, the mass media and the entire electoral process.
  • Foreign Contribution(Regulation) Act, 1976 allows political parties to accept donations from foreign entities. Lot of contributions from foreign individuals and companies have come into questions of late. It is felt that there are many loopholes in it. Again here the EC has to be strict. The foreign contributions are easier to detect and so the problem will not be as much as it is in the context of the indigenous situation.

Role of Election Commission

  • The election commission is trying to take two fold measures. One is the reduction in the number of political parties and the other is public funding. It is trying to reform from within by taking steps that is acceptable to all the political parties.
  • Elections play a very big part in generation and spending of black money. Election commission suspect that many of these political parties are for money laundering operations and they only exist on paper. Many political parties do not file income tax returns and even if they do they do not send a copy to the Election Commission which is mandatory. The present decision by the EC is step forward.
  • The EC do not have overarching powers to derecognise parties. The EC has written in this regard to several governments. Therefore it is going ahead to write a letter to the chairman of the CBDT hoping that the CBDT will move forward to find out what is the financial status of political parties.
  • There is an overall architecture provided by EC that how much a candidate can spend in a particular constituency. But then the political parties are free to spend any amount. One practical reform that can be initiated is suppose a political party has 100 candidates and a limit that EC provides is Rs 10 for a candidate and then multiply 10 with 100 which should be the maximum limit which can be worked out but we are not able to evolve it.

Need of the Hour

  • Taking any punitive action against the entire system is not easy because the parties grow and decay. Best reform possible is to see that all the political parties come under RTI and there should be a proper auditing that should be available to the electorate. Anonymous contribution if reduced from 20,000 to 2000 will be an important step.
  • Ultimately it comes to public morality, awareness and the intention of the political parties which are extra constitutional bodies and in a fluid situation like India where new parties emerge and old parties suffer serious setbacks. There should be certain amount of flexibility in dealing with the menace of black money. If the anonymous payment is done away with totally, it is the perfect solution that can be thought of. In the age of digitisation this is possible for which there needs to be a political will. But what if there are genuine small donors who want to remain anonymous which is also a right. The right to remain anonymous is a democratic and a fundamental right. If an individual makes a donation to a religious institution it depends on his or her prerogative. Right to remain anonymous is perfectly justified.
  • Ultimately what requires in a political culture of democracy is a balance and if this can be worked out well, then some progress can be achieved.
  • It might be advisable to evolve rules where the donors cannot give anything in cash; they can contribute any amount under prescribed limit either through cheque or through online money transfer which ensures credibility and we will know how much contribution has been made by a particular company or by an individual.

State funding of elections

  • The Law Commission had prepared a report on the issue of state funding of elections and it had gone into depth on various aspects connected to this. It had expressed that it is not in favour of state funding of elections entirely on one side and on the other side it has said state funding of elections is good to contain the rising cost and evolution of the modern methods of elections.
  • State funding is not practiced satisfactorily anywhere in the world. In US half of the sates have state funding but even it does not work well because the limit of expenditure is not set for political parties. So there is need to set and enforce limit on expenditure.