For Sale – Elections ! Elections ! Elections !

Elections are at the heart of Indian democracy. Right from the first general election held under the supervision of Mr. Sukumar Sen in 1952 to the latest one in 2014, regular elections have ensured that our democratic traditions are maintained and that the political class can be held accountable in the court of the people in case they do not deliver.

While free and fair elections can be said to form the hardware of our democracy, it is the software which has caused concern and alarm in recent years. This software comprises the values on which the Indian nation has been built. Ubiquitous corruption, nepotism, venality, sycophancy and crime in public life today are a far cry from the idealism of the Nehruvian era. Politics has come to be synonymous with deception and cunning. The phrase “stop doing politics with me” aptly sums up the emotions that the word conjures in the public imagination.

While strong efforts have been made by the courts and the Election Commission in containing the influence of crime and money power, a lot remains to be done. Electoral reform is a huge topic in itself. In this article we will focus on one particular issue that has come up time and again: funding of political parties and candidates. Recently, the issue was raised when allegations were made on the AAP for allowing dubious donations from what were alleged to be shell companies.

There are various loopholes in the existing regulations that allow misuse of money power by the parties to gain a competitive advantage in elections and by corporates to influence state policy by making hefty donations to parties.

Anonymous donations

Under Section 29C of the Representation of People Act, 1951, parties are required to submit a report of all contributions received in a financial year to the Election Commission. However, the requirement is not applicable to donations under INR 20,000. So source name, address, etc. remain unknown for these donations. As a recent report by National Institute of Public Finance and Policy on Black Money points out, more than 75% funds raised by 11 major parties between 2009-10 and 2010-11 were from unknown sources. The opacity of such income opens up avenues of bribery, corruption and also the possibility that it could be black money, proceeds from crime or other illegal activities.



Caps on Expenditure

Section 77 of the Representation of People Act, 1951 calls for a cap on expenditure incurred by candidates during elections. The cap is fixed by the Election Commission and revised from time to time. But there is no such cap on party expenditure. This provides wide room for manipulation of finances where the party can spend potentially unlimited sums on a particular candidate’s campaign. This disturbs the level playing field without holding the party accountable. Even the cap on individual candidate expenditure faces various problems in practice. The expenditure is evaluated within the period of notification of the election and declaration of results. It is well known that a good amount is spent by the candidates even before the election notification. Further, petitions challenging an election have to be filed within 45 days of declaration of results while candidates get 30 days to file expenditure statements. This leaves only 15 days effectively for analysing expenditure statements and filing petitions.

RTI and transparency

While anonymous donations themselves are a huge source of opacity in finances of political parties, parties have also resisted attempts to access their accounts through RTI. Under RTI, “Public Authority” also includes bodies owned, controlled or substantially financed by Centre or a State. The financing may be direct or indirect. Since many expenses of recognised national political parties are covered by the state including land at cheap rates in prime areas, accommodation, tax exemptions, free air time for campaigning, etc. they should be come under RTI. 6 national political parties had refused to divulge information regarding financing under an RTI application. The applicant went on appeal to the Central Information Commission and won the case in 2013. Later on, a bill was introduced in the Lok Sabha to remove political parties from the ambit of RTI. Although the bill hasn’t been passed, it is against the very spirit of RTI.

The menace of paid news

Paid news is defined by the Press Council of India as any news or analysis appearing in print or electronic media in exchange for consideration in cash or kind. This might be in the form of ads disguised as news, denial of coverage to select candidates, etc. There has been a rise in the phenomenon due to corporatisation of media, lack of a robust regulatory framework to curb paid news and no legal provisions to penalise candidates involved in the practice. In fact paid news is not recognised as an electoral offence or a corrupt practice under the Representation of People Act.

The way forward

In light of all the above observations, there are some straight forward suggestions which should be implemented to check the growing influence of money on elections. The upper limit for anonymous donations needs to be revised, expenditure of political parties in an election must be capped, RTI must be implemented in letter and spirt with parties disclosing contributions suo motu on their websites to maintain transparency and paid news must be regulated. Brazil’s experience offers some lessons regarding paid news. Here media exposure to parties is highly regulated. Political ads on radios/TVs are banned, newspaper ads are highly restricted, parties get limited free air time in proportion to their vote share in previous election and starting 3-4 months before election, media is banned from airing news favouring any party.

One radical solution often proposed to end corruption in elections is that of state funding. This means that recognised political parties at the national and state level will get either partial or full funding to contest elections either in cash or in kind from public funds. Many committees have recommended state funding in the past including the Law Commission and 2nd Administrative Reforms Commission. The idea is to make the parties less dependent on large corporate and private donations thus isolating the government of the day from extraneous influences in policy making. The Election Commission however is against state funding. It has argued that state funding will be effective only when it is full and not partial and in cash and not kind. It should also be accompanied by a total ban on corporate or private donations and rigorous audit of party accounts by an independent auditor or the CAG. According to the ECI, without such stringent provisions, the hold of vested interests on the electoral process will continue.

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