EPW Editorial


Electoral reforms should look beyond “anonymity of donors” to make a real difference.




Who finances elections in India? Looking at the Election Commission of India’s (ECI) provisional election expenditure estimates over the past six decades—skyrocketing almost 274 times from ? 0.26 million to ? 71.38 million per constituency between 1952 and 2014—one is barely left with any doubt about the presence of some enigmatic benevolent sponsors in the backyards of the political parties in this country. In fact, a recent survey of some 2,577 politicians across Bihar, Uttar Pradesh and Jharkhand, conducted by the University of California, Berkley, shows that the preponderance of such inscrutable sources of income reaches the zenith for high-level incumbents like a member of Parliament or a lower house in the stateassembly (constituting almost 44% and 47% of their respective incomes). This finding inadvertently ends up implying that political financing in India is an economy in which the state will keep exerting a heavy hand to incentivise clandestine funding. Thus, it is no surprise that the National Democratic Alliance (NDA) government’s electoral bond scheme does not break through this opacity, despite the government’s drum-beating about its mythical claim for transparency.


Electoral reforms in India have had a chequered history that has seen the political will for enforcing and or adhering to the regulatory systems of election and political financing conspicuously missing. The electoral bonds, however, have lent the political parties the statutory immunity for denting, rather than simply circumventing, these regulations. And, the most disconcerting aspect of such sanctions is that these make the electoral system potentially an apparatus for legitimising the black income of both the “benefactor” and the “beneficiary.” For instance, by relaxing the definition of “foreign source” companies through the amendment of the 2016 Finance Act, the NDA has opened up the route for legalising the political donations even from shell companies. On the other hand, while the amendment in the Foreign Contribution (Regulation) Act (FCRA), 2010 has removed the embargo on foreign funding for Indian elections, its application with retrospective effect for 42 years has enabled political parties (the Bharatiya Janata Party and the Congress in the main) to emerge clear of sub judice inquiries on “illicit” foreign donations in all previous elections (the Delhi High Court had held both the parties guilty of such defilement in 2014). Again, there are amendments in the Representation of the People Act, 1951 and the Income Tax Act, 1961 that have legally reinstated the case for anonymous donations, though for amounts below ? 20,000. Yet, there remains an absence of clarity regarding the maximum number of times that donations of this magnitude can be made by any particular contributor. Ironically, all these provisions are articulated by a government that is boastful of its “surgical strike” on black money (aka demonetisation).


While the ECI has rightly pointed out that the electoral bonds would wreck the transparency in political funding, its concern for denuding transparency seems to be circumscribed by a rather censored goal of providing a “level playing field” to all contesting parties, and not driven by the overarching objective of preserving the “spirit” of universal adult suffrage. But, a level playing field is elusive when elections are becoming highly competitive in nature. Such competitive elections are likely to evidence increasing monetisation because the smaller the chances are for a candidate in getting elected, the higher is their usage of money for mitigating such risks. At the same time, there is the vicious cycle of monetary handouts (either as note-for-nomination or note-for-vote), increasing numbers of political contestants, and fragmented electorates, which undermines the representative character of the democracy. Given this context, the commitment of the ECI, or any such regulatory institutions, to ensure the transparency of the overall electoral process should stand up to as much scrutiny as the political will of the contending parties.


If money is the distorting factor for an ethically integrated polling process, why did the ECI raise the expenditure limit for individual candidates from ? 40 lakh to ? 70 lakh? And, that too, when the (self-declared) audit reports of key contestants from the dominant political parties showed only 15%–20% utilisation of the erstwhile prescribed expenditure limit. In fact, how does the ECI even determine how much money is “enough” for a candidate to contest an election? By raising the expenditure limit for candidates despite their (self) reported underutilisation, is the ECI silently admitting the deliberate under-reporting of incomes and expenditures by political parties and candidates, and in turn the porosity of its own monitoring mechanisms to prevent such manipulations?


Despite the plethora of commissions and recommendations, the failure to contain the costs of elections and the impropriety of their funding, suggests that the institutional ecosystem in this country is orchestrated to safeguard the state-driven laissez-faire attitude towards political funding. Regulatory institutions, be it the ECI or the Supreme Court (as per its judgment on the electoral bonds dated 12 April 2019), are deliberating on the interests of the (relatively few) donors, rather than the 850 million voters, notwithstanding that the identity linkage between the political parties and their donors can dictate the degree of the voter-centricity of state policies. However, lost in this myopic political blame game are fundamental issues—such as the codification of election expenditures, monitoring beyond the period of the model code of conduct, and the very structure of the electoral system—which could have made a real impact on electoral reforms.

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