Towards digital political funding
Alok Tiwari
By dealing a fatal blow to electoral bonds,
the supreme court has not only removed a major source of corruption in the
polity but also salvaged its own reputation as an independent institution that
is able to stand up to an overbearing and arrogant government. This column (LT,
Nov 5, 2023) had highlighted some of the concerns that the apex court has
flagged about the ill-advised electoral bonds scheme that brazenly legitimized
corruption. The bonds enabled any individual or entity to fund any political
party in complete anonymity. This meant the voters had no chance to ever find
out if such donations had influenced the policies in favour of any individual,
company, or a group. Adding a truly Goebbelsian touch, the government tried to
sell the scheme in the name of transparency when it sought to do exactly the
opposite.
It is no surprise that the bulk of the
funding through bonds went to the ruling party. It is also no surprise that
this government is facing the charge of crony capitalism. Though supreme court
has ordered that names of those who had donated through the bonds be made
public along with names of beneficiary parties it is far from certain the
process will be smooth. Those in power will try every trick to prevent it.
Already arguments are being advanced about how the order falls foul of the
banking rules about protecting confidentiality of customers. The legal system
needs to guard against such attempts. While protecting confidentiality is
important in banking it could not extend to shielding what is manifestly a
criminal act. The same rules were used to shield chronic and large-scale
defaulters of banks. Confidentiality of individuals must take a back seat when
there is crime involved or there is an over-riding public interest.
The government has also argued that absence
of bonds will mean political funding goes back to the old ways of parties
accepting cash. Since companies are now bound by old rules of making political
donations, those wanting to give more than allowed would look for ways to do it
using dubious means. This concern is genuine. Political parties need crazy
amounts of money to function. Not only contesting elections is very expensive
but money is also needed for day-to-day operations when there are no elections.
In fact, this is often described as Gangotri of corruption. Much of the
commission system seen in entire government machinery can be traced back to the
virtually insatiable appetite of parties for money.
While this problem is genuine, electoral
bonds was the wrong solution to it. It only ended up making matters worse.
There are ways in which it can be addressed. The first effort should be to
reduce the need of parties for money. This is difficult but doable. There can
be limits imposed on number and size of political rallies. Also, closer watch
needs to be kept on personal expenses of netas like use of private jets for
travel. In the age of electronic and social media when virtually every person
has access to internet and smart phones, it should be possible to reach
political messaging to people cheaply. Also, recognized parties should be given
equal access to TV and Internet channels, both private and government, by law.
This would obviate the need for rallies and roadshows that cost money as well
as inconvenience people. If we can reduce cost of electioneering, it would
negate the advantage that party in power or with more money has. It will also
lower entry barrier for other parties and more genuine people who are unable to
raise a lot of money can emerge as leaders.
There is an existing limit of Rs 20,000 for
parties to accept cash donations. In the past parties have tried to hoodwink
the authorities by claiming most of their money has come through individual
donations smaller than this amount. To remove this loophole, the limit needs to
be brought down to zero. We can make a rule that parties accept and spend money
only digitally. At a time when even vegetable vendors and rickshawpullers are
accepting digital payments, it should be possible for even smallest person to
donate to a party of choice digitally. Similarly, it is entirely possible for
parties to make all their payments digitally. Right from paying for buses to
bring people to rallies, to those who make huge cutouts, to paying workers for
their leg work, to corporate jets used by star campaigners should be paid
electronically. Nobody should be allowed to spend any money on behalf of a
party or candidate. They can donate money directly to the party concerned. India’s
success in digital payments has been toasted throughout the world. Why should
political parties remain away from it?
In fact, the ruling BJP, as champion of
digital payments, should take a lead and declare on its own that it would go
completely digital in financial matters. Not a single rupee would be accepted
or given in physical form. This means every donation and every expense is
recorded and is verifiable. To ensure that parties follow the mandated spending
limits, their accounts should be regularly and independently audited. For this
purpose, every party should be asked to name an independent auditor to a panel.
The Election Commission should assign these auditors to parties randomly with a
proviso that no party be audited by a firm named by itself or its alliance
partner. Their services should be paid for by a common fund to be set up by EC
and audit reports should be published on EC website. In case, parties are seen accepting
to giving any money from unknown or non-traceable entities, they should face
immediate disqualification.
Of course, it is easier said and the scheme
may need further nuancing through inputs from knowledgeable people. This should
happen in the budget session of the parliament. Parties, leaders, and anybody
interested in having a clean and accountable political system should be able to
give inputs. What is important is that political parties, especially the ruling
party, display a will towards that end.
This column appeared in Lokmat Times on Feb 21, 2024
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