India Poll Panel Raise Concerns Over New Finance Norms

  • India’s new campaign finance rules allowing anonymous donations reduce transparency in political funding, the country’s election commission said in a filing at the nation’s top court.
  • The Election Commission of India — one of the respondents in a case filed against the new funding rules — said anonymous donations have serious repercussions and impact on the transparency of political funding, according to the document seen by Bloomberg.
  • The court is hearing petitions challenging the introduction of ‘electoral bonds’ and seeking a ban on cash donations filed by Association for Democratic Reforms, a non-government organization.
  • The changes in law allow anonymous donations through electoral bonds which can be bought at a bank in denominations ranging from INR1,000 rupees to INR10mn and given to a political party, which can exchange them for cash.
  • They don’t carry the name of the donor and are exempt from tax. The government has claimed that the changes will cleanse political funding. The move was criticized for allegedly legalizing large anonymous donations that can potentially lead to businesses and foreign companies gaining influence over the elections that start on 11 Apr 19.
  • The election commission said the rule allowing political parties to receive donations from foreign companies having majority stake in an Indian company would “allow unchecked foreign funding of political parties in India, which could lead to Indian policies being influenced by foreign companies.”
  • NGO ADR (Association for Democratic Reforms), through activist lawyer Prashant Bhushan, had challenged several provisions in the law, including the ones that have done away with a cap on corporate funding through electoral bonds and allowed foreign funding.
  • According to Bhushan, data showed that 90% of the funds had gone to one party, that is the ruling party. He had also claimed that the anonymity of these bonds encouraged black money and money laundering.
  • The commission pointed out to the court that it had urged the government to change the law to ensure greater accountability over party funding and expenses, but there was no political consensus on this.
  • Almost all political parties are opposed to opening their accounts for audit, or their political funding public right down to the last penny. As per existing law, parties can accept only up to INR2,000 in cash; anything more than that must be through formal banking channels.
  • However, they need not keep details of all anonymous donations through electoral bonds up to INR20,000.
  • The top court is scheduled to hear the case on 2 Apr 19.

External Link: https://economictimes.indiatimes.com/news/politics-and-nation/we-opposed-anonymous-electoral-bonds-you-take-call-now-ec-tells-sc/articleshow/68606723.cms

External Link: https://www.bloomberg.com/news/articles/2019-03-27/india-poll-panel-said-to-raise-concerns-over-new-finance-norms

28-Mar-2019


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