BJP, AAP funds scam: Can PM Modi weed out black money rot in political system?

Yet again, the lack of transparency in political funding, has taken the centre stage with both the Bhartiya Janata Party (BJP) and Aam Aadmi Party (AAP) actively engaging in mud-slinging, questioning the means their rivals raise funds to sustain their respective political establishments.

Especially for the BJP, which has declared a crusade against black money holders seeking asylum in foreign tax havens, it is supremely critical to clear its position back home first on the ways it solicits funds flow into its own kitty. But so are for the Congress and other political outfits too.

The lack of transparency kills the right and locus standi of political party to question the wrongdoers involving black money holders/ tax evaders or, for that matter, any financial misappropriation involving public money.

Representational image. Reuters

Representational image. Reuters

That is probably the situation most of our leading political parties find themselves in and the problem runs deeper and widespread. If one goes by the latest report of the Association for Democratic Reforms (ADR) and National Election Watch for 2013-14 that analyses the details of political funding received by various political outfits, there is a lot of explaining most of the leading parties, including the BJP, has to do.

At present, about 75 percent of the sources of funds to political parties remain unknown. This is in stark contrast to the situation in several countries such as Bhutan, Nepal, Germany, France, Italy, Brazil, Bulgaria, US and Japan, where the complete details of the donors to political parties are publicly available.

Going by the report, the BJP hasn’t yet submitted its donations report to the election commission for 2013-14, while the Congress has not provided PAN details of donors, without which it would be difficult to link the donors against their donations and hence trace the money trail.

These words would sound similar to the ones often used in the black money probe, even though the stated donations of political parties are just a minuscule when compared to the circulated blackmoney numbers.

But more than the size of funds, perhaps, the practice should be questioned since it concerns public representatives.

Now, take a closer look. As per the 2013-14 report, the total amount of donations above Rs 20,000 declared by the national parties was Rs 76.93 crores, from 881 donations. The congress received Rs 59 crore, NCP Rs 14 crore, CPI about Rs 1.22 crore and CPM Rs 209 core.

Interestingly, the BSP declared that the party did not receive any donations at all above Rs 20,000 during 2013-14, as it has declared in the past. As mentioned earlier, the BJP hasn’t submitted the donation report.

To be sure, the ADR report for 2013-14 doesn’t give the total income details of political parties but just donations, which forms only a fraction of the total income. The remaining came from other channels such as sale of coupons and voluntary donations in the form of cash donations, where the identity of the donor is difficult to establish for taxmen.

But, according to its previous reports, the total income of national parties between 2004-05 and 2012-13 stood at Rs 5,890.66 crores. These numbers exclude funding of regional parties. These figures only include the declared income, which typically constitute less than a quarter of the total income of the outfit.

Of the total declared income of national political parties in 2013 (Rs 991 crore), declared donations formed only a fraction (10%) of the total income.

There is high probability that significant chunk of cash mobilised by Indian political parties for election funding and other expenditure are black money transactions that take place right under the nose of the government, central bank, taxmen and a myriad of investigative agencies.

A lot of cash donations received remain unaccounted for in the books of accounts as only those amounts would be recorded for which a receipt has been issued, warns the previous round of ADR report.

Given that unearthing black money is one of the major poll promises in Narendra Modi’s election agenda, he shouldn’t be silent about lack of transparency in political funding. Remember, Modi himself emerged victorious in the recent election riding a massively funded campaign.

But to be sure, there is no logic in questioning one politician alone as most of them are complicit. Their silence on lack of transparency in political funding is probably linked to the very question of their existence itself.

In 2012-13, the Congress declared the highest total income of Rs 425.69 crore, followed by the BJP with Rs 324.16 crore and the BSP with a declared total income of Rs 87.63 crore. The NCP had a total income of Rs 26.56 crore, CPI Rs. 1.07 crore and CPM Rs 126.09 crore.

In 2012-13, corporates topped the list of contributions with 72 percent to the national parties followed by individual donations with 17%. On the other hand, in 2013-14, corporate contribution to total donations rose to 90 percent of total, while those fro individuals stood at 10 percent.

In 2012-13, about 63 percent of donors to the national parties have not declared their PAN details in the contribution form. Interestingly, the BJP has listed the maximum number of donors, who have not declared their PAN details. How much money has changed hands from corporate and wealthy individuals to politicians?

In 2013-14, a total of Rs 6.66 crores was declared by INC, CPI and CPM as amounts received by cheque/DD without disclosing corresponding cheque/DD numbers, name of the bank/ branch on which the cheque was drawn, etc. which would aid in tracking the donations. These incomplete details account for 9% of the total donations received in cheque/DD/ fund transfer, ADR report said.

According to Section 29C of the Representation of People Act, 1951, the political parties have to submit their contribution details received in excess of Rs 20,000 from any person or a company to the election commission of India annually.

According to ADR report, named contributions i.e. single contributions above Rs 20,000 were found to be very few in number for all the parties when compared with their total income, raising serious questions about the source of the significant part of their funding.

Beyond the technicalities, the basic point here is that given the experience of rampant corruption across sectors involving politicians and corporations, the funds flowing into political coffers, every penny of it, by all political parties, should be brought under the right of public to scrutinize.

It would be particularly difficult for the ruling government to convince the common man about its willingness to fight blackmoney before cleaning up its own house.

Such an exercise, besides increasing the credibility of political establishments, would also help to expose the infamous nexus between corporations, politicians and banks that has given rise to a huge amount of bad loans in India’s banking system.

The last time the government made any change in the election funding rules was in 2003 when it allowed corporations and individuals to seek income tax exemption on donations made to political parties of Rs 20,000 or more in a year.

Any significant change that relates to the political funding should happen through appropriate legislation.

The big question is whether Modi has the political will to exorcise corruption and black money from the political establishments including his own?


Updated Date: Feb 05, 2015 07:45 AM

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