Among the announcements made by Prime Minister Narendra Modi in his December 31 address to the nation was an appeal to political parties to be “mindful of the voice of people” when it came to corruption in political funding.
On Wednesday, Finance Minister Arun Jaitley announced that he would be accepting the Election Commission’s recommendation and reduce cash-only donations to political parties to ₹2,000 from ₹20,000 earlier.
Mr. Jaitley said he would be making amendments to the Reserve Bank of India Act to issue electoral bonds as a form of political funding.
The imprint of the Prime Minister on this Budget, therefore, goes beyond the usual political aims espoused in that document of a rural or urban focus and poverty alleviation programmes and tax breaks.
“You would have seen, my fight against black money and corruption is on. Political funding has always been a matter of discussion. Political parties are always under the scanner in this regard,” Mr. Modi had said on the issue.
Shadow economy
Mr. Jaitley spoke to The Hindu explaining the move: “This [clean-up of political funding] has been a campaign with the Prime Minister since he announced demonetisation. We call ourselves the largest democracy in the world and the fastest-growing economy. This political system, therefore, cannot be funded via the shadow economy.”
Mr. Modi has been zealous about his government’s efforts to combat black money and corruption, as is also evidenced by another Budget announcement, that of amending laws on seizing properties of those on the run from law.
Such a law is already being referred to as the “Vijay Mallya Law” in Parliament’s corridors, with reference to the industrialist who fled to the U.K. to escape institutional creditors.
While the BJP, in its poll manifesto for the Uttar Pradesh elections, has promised a loan waiver for farmers, if elected, Mr. Modi has not been known to be a great fan of doles and waivers.
Credit limit
In this Budget, therefore, while the focus has been on rural areas, it has been in the form of raising the credit limit for farmers to ₹10 lakh crore, computerising cooperative banks, and setting up a micro irrigation fund under NABARD.
Mr. Modi described the Budget as “Uttam” or the best, reflecting his own, rather spartan sensibilities.
