{"id":223,"date":"2019-04-07T09:57:09","date_gmt":"2019-04-07T09:57:09","guid":{"rendered":"http:\/\/www.kamalsandesh.org\/blogs\/?p=223"},"modified":"2019-04-20T10:24:42","modified_gmt":"2019-04-20T10:24:42","slug":"choice-political-funding-cheque-electoral-bonds-blackmoney-contractors-middlemen","status":"publish","type":"post","link":"https:\/\/kamalsandesh.org\/blogs\/choice-political-funding-cheque-electoral-bonds-blackmoney-contractors-middlemen\/","title":{"rendered":"The Choice of Political Funding \u2013 Cheque, Electoral Bonds or Blackmoney from Contractors and middlemen"},"content":{"rendered":"

Arun Jaitley<\/strong><\/p>\n

T<\/strong>he past few days have witnessed several cases where the Election Commission and the revenue authorities, both separately and acting jointly, trying to curb the use of blackmoney in elections.\u00a0 These actions have been particularly significant in States like Karnataka, Tamil Nadu, Andhra Pradesh, North-East and Madhya Pradesh.\u00a0 The Election Commission and the Income-tax authorities work in close tandem during elections.\u00a0 In many cases, monies have been coming from Government contractors and beneficiaries.\u00a0 In one State, contractors passed on monies to engineers who were to distribute it to the candidates.\u00a0 In another State, which only four months ago elected a new Government, fifty thousand Government transfers became a revenue generating exercise.\u00a0 Reports have also indicated that an amount of about Rs.1500 crore has already been seized.<\/p>\n

The disinformation of the NGOs<\/strong><\/p>\n

NGOs always claim to be well meaning.\u00a0 They have a tendency to either exaggerate or misrepresent.\u00a0 Those dealing with elections and electoral reforms have come out with two categories of reports.\u00a0 The first one says that since in its balance sheet the BJP declares much larger income, it should be assumed that it gets more donations than other parties.\u00a0 The second report says that BJP gets the lion\u2019s share of the electoral bonds.<\/p>\n

Both display a lack of understanding of how parties function.\u00a0 All parties need, on a pro-rata basis, the same amount of money depending on the number of seats they are contesting.\u00a0 The only question is \u2018What is their fund collection culture?\u2019\u00a0 Do they still prefer the old obsolete style of only blackmoney being collected or do they prefer to collect it by legitimate methods like crowd sourcing, cheque and electoral bonds?\u00a0 Obviously, the BJP prefers the latter.\u00a0 It declares larger income and gullible friends in the NGOs believe that they get more.\u00a0 Do they honestly believe the balance sheets of the BSP and the SP, the TDP or several other parties?\u00a0 They obviously don\u2019t disclose the income that they get because most of these donations are in cash.\u00a0 This has significantly reduced the credibility of the reports of these NGOs.<\/p>\n

The journey of funding reforms<\/strong><\/p>\n

I have been associated with the entire journey of political funding reforms.\u00a0 As Law Minister in the Vajpayee Government, I had moved a Bill legitimising donation of cheque provided the same are declared to income-tax and the Election Commission.\u00a0 To incentivise these donations we provided that the amount donated to political parties would be deductible expenditure.<\/p>\n

Shri Pranab Mukherjee, as a Finance Minister during the UPA-II, brought out a second reform in the year 2010.\u00a0 Blessed with great wisdom and depth, he realised that merely providing for cheque donations won\u2019t bring a change.\u00a0 Donors fear the consequences of their revealed identities being linked to a political party to whom they donated.\u00a0 He very wisely masked the identity by creating a pass-through electoral trust in 2010.\u00a0 A donor could donate to a registered electoral trust which in turn would donate to a political party.\u00a0 The disclosure will only be of the name of the electoral trust and the link between the identity of a donor and the party would be snapped.\u00a0 This practice legislated by UPA-II, is still in progress and utilized by some.<\/p>\n

In 2017, based on the principle of masking the identity link between the party and the donor, the NDA created the instrument of electoral bonds.\u00a0 This instrument provides for a complete white money donation.\u00a0 The bond as a banking instrument of State Bank of India, a Party had to deposit it in a single declared account by the political party.\u00a0 Both at the hands of the receiver and the donor, it is white money through a declared channel.\u00a0 As far as the transparency is concerned, as against the original system of cash which was non-transparent throughout, there is an improved transparency in the electoral bonds.\u00a0 The donor declares in his balance sheet the quantum of bonds that he has bought.\u00a0 The State Bank of India has a record of the donors.\u00a0 The recipient party declares the amount of bonds it has received.<\/p>\n

The link between the donor and the identity of the party is masked in the same way as is done in the case of electoral trust.\u00a0 Thus, both the electoral trust of 2010 and the electoral bonds of 2017 assured a total white money and improved transparency but masking the identity of the link between the donor and the party.\u00a0 This obviously has been done to encourage donors to donate white money without fear of consequences.\u00a0 Surprisingly the attack is against the bonds and not the electoral trusts because the earlier was brought by the NDA and the latter was by UPA.\u00a0 The underlying principle of both is the same.\u00a0 If the bonds don\u2019t exist, the consequence will be that donors will have no option but to donate only by cash after siphoning monies from their businesses.\u00a0 The recent Election Commission and IT raids have shown that it is taxpayers\/ Government\u2019s money, which, through PWD and other Departments of the Government, is being siphoned out and round-tripping into politics.\u00a0 Is that a better option or the reformed system of all white money and improved, if not a perfect transparency?\u00a0 NGOs and commentators must look beyond their nose.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Arun Jaitley The past few days have witnessed several cases where the Election Commission and the revenue authorities, both separately and acting jointly, trying to curb the use of blackmoney in elections.\u00a0 These actions have been particularly significant in States like Karnataka, Tamil Nadu, Andhra Pradesh, North-East and Madhya Pradesh.\u00a0 The Election Commission and the<\/p>\n","protected":false},"author":707,"featured_media":141,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[220,221,219,218,217],"class_list":["post-223","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-political","tag-cheque","tag-electoral-bonds","tag-funding","tag-political","tag-the-choice"],"wps_subtitle":"","_links":{"self":[{"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/posts\/223","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/users\/707"}],"replies":[{"embeddable":true,"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/comments?post=223"}],"version-history":[{"count":2,"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/posts\/223\/revisions"}],"predecessor-version":[{"id":267,"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/posts\/223\/revisions\/267"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/media\/141"}],"wp:attachment":[{"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/media?parent=223"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/categories?post=223"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/tags?post=223"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}