Black money: Attack on benamis fine, but why is Narendra Modi silent on linking political donations to Aadhaar?

The Narendra Modi-government’s intent to crackdown on benami real estate transactions above Rs 30 lakh is a logical follow-up to demonetisation. Perhaps more than demonetisation, investigations on benami properties and shell companies, if done correctly, makes more sense since much of the illegal money is stored in assets rather than hard cash. This is one of the reasons why almost entire money demonetised on 8 November, 2016 reached back to bank counters in no time.

But, attack on benamis is not enough. The Modi government’s seriousness to fight black money will be questioned on account of its reluctance to make political funding transparent. Except for some cosmetic changes, there is no follow-up actions on this so far. Even now, a business house can fund any political party without revealing its face.

In the Union budget 2017-18, the maximum cash donation a political party can accept from one source has been brought down to Rs 2,000. Till then, any political funding less than Rs 20,000 didn’t require to show its source. This was a step in the right direction but no follow-up measures were taken. Even now, any individual can make anonymous cash donations to any political party by splitting it into receipts of less than Rs 2,000. It will take only a few hours even for an average accountant to complete this anonymous transaction. Companies don’t need to disclose the names of political beneficiaries even to their shareholders.

PTI image

PTI image

Money thus given to corporations can be claimed back by the donor through various political favors. The political-corporate nexus will continue to thrive in full swing. Imagine a big corporate promoter coming under investigation for black money, the political party which received his political funding will certainly have a sympathetic approach to him/her.

The irony is that all political parties, including the ruling party, know this but no one wants to act since all drink happily from the same cup and it tastes good. The government wants all citizens to link all their activities, including mobile numbers and bank accounts, to Aadhaar so that they can be monitored constantly but doesn’t want to apply the same rule to political funding. The government doesn’t want more transparency on most activities performed by its citizens.

Why not link Aadhaar to political donations? Wouldn’t it make transparent? Of course, it would. But for the reasons mentioned above, no politician would want to do that. For example, just look at a recent statement made by Goa chief minister, Manohar Parrikar on the subject. When he was asked on linking Aaadhaar to political donations at a Panaji press meet to mark the anniversary of demonetisation, Parrikar said transparency in political funding has limitations since political parties in power could target companies that gave financial assistance to rival parties in the past. "If you link big amounts to the source, there is every likelihood that the next government, if it changes hands, may target the company and the very noble idea of official donation will be driven under," Parrikar said.

What Parrikar has made is an illogical argument against bringing transparency to political funding. Going by Parrikar’s rationale, a logical question arises—What are the chances of the Bharatiya Janata Party (BJP) government too targeting donors of Congress and other political parties? Parrikar probably owes an answer to that question. Steps taken by the Modi government so far against black money—demonetisation, amnesty-like schemes, renegotiating treaties with tax havens—proves that this government wants to do something to curb black money.

What has come out of this battle so far is debatable though. But, the government’s actions lack honesty till the time it acts in a meaningful manner to clean-up political funding. Public representatives do not need so much of secrecy in their financial dealings. Instead, political parties should set an example to the public by linking all political donations to Aadhaar.


Published Date: Nov 15, 2017 11:28 am | Updated Date: Nov 15, 2017 12:14 pm


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