Opinion » Lead

Updated: July 22, 2013 12:22 IST

Demanding transparency in political finance

Shailaja Chandra
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Building on the work by RTI activists, India needs to set up a mechanism that can make for accountability on the sources and utilisation of party funds

Throughout the world, political parties collect funds to build and sustain the organisation, to train party cadres and fight elections. Recognising that they are the main link to the citizens (as voters) and, by implication, the mainstay of democracy, many countries, including India, have helped cushion their expenses at public cost. But the major share of funding still comes from voluntary contribution. Undeniably the sources of such funding influence voting behaviour and that is why the subject impacts directly on democratic rights. Surprisingly when all important institutions of governance, including Parliament, the judiciary and certainly the executive, have attracted intense public attention, the financing of political parties has been left relatively untouched. Until recently.

CIC order

In 2011, two resolute RTI querists — the Association for Democratic Rights, an NGO, and an individual, Subhash Aggarwal — appealed to the Central Information Commission since political parties had refused to share information although by all accounts they were public bodies. The appeals were upheld in an order dated June 3, issued by the full bench of CIC, which ruled that six national political parties needed to provide information as sought by establishing the RTI apparatus as required. The logic: they were recipients of valuable state resources in the form of land, accommodation, and tax exemptions which amounted to “substantial funding” by the public exchequer. Accordingly, they were to be treated as public bodies and made answerable as such.

The day the order was announced, everyone knew that most political parties would come together to annul the damage done by the CIC. They would either seek judicial intervention or introduce fresh legislation to overturn the CIC’s order. Knowing this, the applicants forthwith filed a caveat to forestall the grant of a stay against the order. All newspapers have since reported that a bill has even been kept in readiness to be introduced in the forthcoming session of Parliament seeking to exclude political parties from the ambit of RTI.

The major points of discord are: first, unfurling the RTI umbrella over political parties has implications for political strategy and functioning as once conceded, even information on the distribution or denial of ticket can be sought — clearly a situation that is untenable given the competitiveness, secrecy and intricacy of political decision-making. Second, political parties do not maintain the documentation needed to respond to wide-ranging RTI queries and they cannot be expected to establish a new organisation only to fulfil the sweeping questions that will come under the RTI. Third, if the argument that political parties received “substantial funding” is applied equitably, it would apply to all similarly placed NGOs. The ensuing demands for information from all such bodies would explode the scope of CIC’s functions and belie the prime objective of the RTI which was to provide information on government functioning. Fourth, when it is well known and publicly admitted that most political funding comes from black money sources and in cash, it is impossible to declare whose contribution it was without first cleaning up the “number two” monopoly.

In their place the arguments are not without validity. But none of them addresses the fundamental need to regulate political finance — something that progressive countries enforced decades ago. According to the International Institute for Democracy and Electoral Assistance (IDEA) Handbook 2003 and its current website, in nearly 60 countries, which include the United States, the United Kingdom, Japan, Canada, France, Germany and Thailand, political parties are bound to disclose all contributions beyond a specified threshold. India is not among them. Alongside there exists a ban on making anonymous donations to political parties in more than 45 countries which include all the above countries. Again India is not among them. Happily, India does have a provision for public disclosure of expenditure by political candidates but even so, there is no ceiling on party election expenditure — only candidates’ expenses. That leaves enormous scope for gargantuan indirect spending on elections so blithely admitted to by Gopinath Munde who now faces the wrath of the Election Commission for publicly pitching a figure of Rs 8 crore spent on his own election against the stipulated limit of Rs 25 lakh.

Our political parties appear to see the whole business of being pulled under the RTI as brinkmanship. They rest sanguine in the knowledge that civil society in general and RTI activists in particular can do little harm as the latter’s sphere of influence is essentially urban, middle-class and, for that very reason, circumscribed. Ultimately with no bridges to the people and little influence, they are secure in the knowledge that civil society would have no option but to pursue the public interest litigation route. That alternative despite some resounding successes is exasperatingly slow.

Preventing abuse

Against this backdrop, is the almost universal position of political parties which refuse to give information at least on their funding to be accepted meekly? No, because at stake behind the demand for public disclosure of political finances are two important considerations: prevention of abuse (by using soiled money); the need to promote healthy political competition which requires sharing the sources and quantum of funding of each party with the voter.

Undoubtedly, the stalwarts in the RTI fraternity have done a great job by bringing the subject of political finance into prominence. That conceded, India now needs a law to bring it on a par with progressive countries world-wide. That means mandating disclosure and reporting rules that provide clarity about political funds — their sources and their utilisation.

We need a body akin to what has been set up in the U.S. under the Federal Election Campaign Act 1974 which created an enforcement agency called the Federal Election Commission. This body supervises all financial transactions by political bodies that have solicited or spent money to support or defeat federal candidates. The organisation verifies all reports presented, and discloses the same to the public and the media. Ideally our Election Commission should be empowered to do exactly this, by law. If this were done there is no need for individual parties to give responses under RTI.

An opportunity

Every right-minded political party should look on the CIC verdict as an opportunity — not a threat. In fact, were even two national parties to voluntarily adopt a common reporting system it would remove clouds of opacity, greatly enhance public faith and demonstrate a concern for ethical standards. Others would perforce have to follow suit. Indeed this is a priceless moment for the political system to collectively break itself loose from criminal elements, unaccounted and excessive money power and to remove illegitimacy from the power game.

Political parties should pledge to support a law to ban anonymous donations and cash contributions beyond a threshold and put a ceiling on election related expenses of individual political parties. The Election Commission or a new statutory body should have full authority to oversee the inflow and outflow of political finance and institute legal action if scrutiny is stone-walled. As a public body, it should suo motu give information collected by it on its website and also arrange for regular media briefings based on the declarations made by political parties. But it should have no compunction in resorting to the use of Section 8 of RTI if the information sought by querists goes beyond the subject of political finance — so relieving political parties from the rigmarole of RTI and free to steer their internal political strategies in secrecy.

But first voters need the reassurance that political parties are concerned enough to unite to clean the mess. The present opportunity and its timing can be used to augur the much-needed change. If it is merely used to remove the irritant called RTI, it will show that self-preservation is more important to political parties than bringing transparency into their financial dealings. When half the countries in the world have a strict code and laws on political finance, insist on full public disclosure and impose ceilings on party election expenditure, should the Indian voter be forced to accept any less? When the model code of conduct for elections could be evolved so successfully simply through consensus, why not a model code for political finance?

(The writer is a former Secretary, Government of India, and former Chief Secretary, Delhi.)

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I admire the writer for bringing out the debate in a lucid manner. As aware citizens of this country we understand the need for secrecy in political strategy making. However at the same time we need massive clean up of politics. Cleansing political finance is one issue. There are several other issues related to it like decriminalistion of politics, discouraging political parties to promise freebies etc. The sooner they are addressed better it will be for our smooth running of democracy.

from:  Prateek Tiwari
Posted on: Jul 26, 2013 at 20:22 IST

The political parties must come under the ambit of Financial Audit by an
unbiased independent auditors and they should be made to declare their
financial position periodically and comply with the accounting standards
thus making them accountable as well as enabling better assessment of
taxable income. The move will definitely ease the economic burden that
the country is facing to a certain extent by restricting the flow of
black money, making it accountable and thus generating tax revenue,
easing inflation etc etc.

from:  Sai
Posted on: Jul 24, 2013 at 22:18 IST

This is a necessary for all political parties in the country. I agree
with all points.

from:  john
Posted on: Jul 23, 2013 at 04:47 IST

Commentator DORAI is the only reader mentioned that all political parties are not like the congress party who started this dirty game. He said the truth that AAP and CPI are clean but forgot to mention CPM the largest leftist party ?

from:  Cherian Mani
Posted on: Jul 23, 2013 at 00:50 IST

Issue of accountability and transparency is nohing less than honety. Echleons must understand money used in advertisements and cash for vote could have various and distinct benefits if used caustiously. Govt flagship programmes are not being implemented with fund allocated as savings used by the state ruling party for elections. This behaviour must be ended by bringing polotical code of conduct for transprancy in funds. Change is good.

from:  Feroj
Posted on: Jul 23, 2013 at 00:06 IST

Since the day politics became business, it is just how much & how fast money made. Never for whom and how spent. Because always there is a word why?

from:  Muralidhar Mallya Ullal
Posted on: Jul 22, 2013 at 22:28 IST

Great contributors to constitution would never thought that there were
ways to amass wealth from the public for the political camapign
activity, if that was the situation there would have been some
constitutional laws governing and regulating these activities. Writer
clearly points out the need for mechanism or body which can handle
this. Now to make any laws regarding this situation needs political
consensus/majority, and the nexus between different political parties
can always topple this move, though there is a need by the pressure

When successful democratic countries are implementing this, there is a
definite need of this, it needs a stronger will by the pressure groups
and the policy makers to fulfill this.

People always try to get lost with the present situations like economy
dip, rupee devaluation, schemes making news for bad reasons,
interesting political speeches, etc. but never try to think of these.
Which is not good always.

from:  Hareesh umar
Posted on: Jul 22, 2013 at 19:50 IST

It is shocking to see political parties coming together against coming under RTi scanner.
Reasons are obvious. While all these parties claim to be fighting against corruption and
menace of black money, reality seems to be exactly opposite. All these parties are consistent
and united when it comes to the question of their benefits and financial scrutiny. It is an open
secret that elections are financed majorly using unaccounted money which may be coming to
them against favors given or promised. The statistics of sources of funds submitted by these
parties seem, at best, a joke and no one would accept the same. They have been getting
away with that as the power to legislate is with them only and then they are all united, when it
comes to such issues. Only a revolution of sorts by common people can force this situation
to change which in turn requires strong leadership, something that is hard to find. A strong
social media activism can be a good beginning.

from:  Sunil Vadehra
Posted on: Jul 22, 2013 at 19:42 IST

All political parties are going to make some excuses for excluding them out of RTI. The voters have to be united to demand to make a law like prevalent in the Developed countries, also the civil society has to play an active role in mobilizing support for such a cause. The way forward is through public interest litigation.

from:  AJAY
Posted on: Jul 22, 2013 at 17:13 IST

The political Parties are the poller of the democracy for which India
can be proud being largest democratic country in the World, but our
political parties has no democratic set up in their organisation,the
party bearer are nominated subject to qualify as caste/religion/vote
bank catching capacity,money power and ward regarding political career
of the family rather than his honesty ,ability & morality .The Agenda
of political parties aims of vote catching rather than the national
interest.The C I C has issued judgement for disclosing the details of
party fund ,the all parties become united as become for reservation
and enhancing own benefits.

from:  Laxmi Agrawal
Posted on: Jul 22, 2013 at 17:06 IST

Apart from this, every politician should also declare his assets every
year, this will actual bring more transparency, the reason being we
hear so many news regarding politicians that their wealth is increased
by some number of crores all of sudden .moreover if corporates fund
money to political parties , the corporates should also mention to
which party they are funding , so that we can find the nexus between
political parties and corporates and also we need to check the balance
sheets of the politicians to prove the nexus if exists.

This is the only way we can bring transperancy in our democracy,
merely showing the funds will not bring any change in game of
politics, whatever will go it will go .

from:  Manohar
Posted on: Jul 22, 2013 at 16:41 IST

This is a long-term campaign but one worth starting before the 2014 General
elections. The media should continue raising this issue of campaign finance reform and
people should keep demanding answers regarding funding from political parties.
Political parties should not be allowed to get away thinking they are not answerable.

from:  Alaphia Zoyab
Posted on: Jul 22, 2013 at 14:19 IST


as a common man we donot have powers to oppose those who amend constitution according to their benefits and personal interest.

Posted on: Jul 22, 2013 at 14:11 IST

In India political parties after coming in power run Governance in a
democratic set up,if such political parties themselves not based on
democratic principle how can we expect that they will run government
democratically.first of all, intra party democracy should be set up, may
be established by intra party election,then state funding of election
would be a feasible option provided a proper law in place regulating
party functionaries. RTI will be a booster enhancing transparency and
accountability this will strengthen the root of democracy.

from:  Naveen
Posted on: Jul 22, 2013 at 13:16 IST

Without a pinch of doubt, we all can be sure that Indian political parties will find ways to dodge this verdict given by CIC.After all chicanery is something, Indian political parties can teach the world.

from:  Ishan Dogra
Posted on: Jul 22, 2013 at 10:12 IST

A common man would whole-
heartedely support the views expressed in this article. But the top
leadership of the political parties would vehemently oppose their
coming under the RTI umbrella because of the crooked manner they
collect their funds.

The political parties have the power to legislate themselves out of
the ambit of the RTI that they might try to do. Would this impinge
upon the basic structure of our Consitution to be considered ultra-
vires? Also wouldn't such legislation be considered invalid because it
wasw passed to benefit the legislators themselves.

from:  Amarnath Wanchoo
Posted on: Jul 22, 2013 at 08:18 IST

Aam Aadmi Party (AAP) is the only party which has given out voluntarily the transparent political finance details even if it is only a rupee, without a RTI by showing it is transparent from the very beginning. This is one of the first initiatives by AAP to avoid political corruption. The other parties have reservations and not come forward yet except CPI. In the public eyes, all parties should act in a transparent way in political finance.

from:  DORAI
Posted on: Jul 22, 2013 at 07:17 IST

All party funds are from general public of various sections - society, business community, friends, well wishers and so on. In reality, every party that want to serve the voters should do so from the balance and use it for the public such as freebees etc;.tax payers money is for major developments only.Unfortunately almost all politicians have amassed wealth in this method and it is high time to control it. The first action should be from the public.

from:  V.Sivasubramaniam
Posted on: Jul 22, 2013 at 07:15 IST
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