The Bharatiya Janata Party (BJP) received a whopping Rs 2,642.63 crore as income from sources that cannot be traced, the highest among the national parties. Meanwhile parties from the South topped the list of regional parties with maximum income from “unknown sources”. This was revealed in two successive reports by the Association for Democratic Reforms (ADR), the first published on August 31, 2021 (national parties), and the second on November 11 (regional parties).

BJP’s bounty

An analysis of funding sources for national parties showed that the BJP declared 72.93 percent of its income from an unknown source during FY 2019-20. Of this, Rs. 2555.0001 cr came from electoral bonds. This unknown income of BJP is 3.5 times more the aggregate of income from unknown sources declared by the six other national parties – Rs. 734.78 cr.

Overall, income from unknown sources accounted for 78.24 percent of the total income (Rs. 3377.41 cr) of all national parties analysed – BJP, INC, AITC, CPM, NCP, BSP and CPI.

“Since a very large percentage of the income of political parties cannot be traced to the original donor, full details of all donors should be made available for public scrutiny under the RTI. Some countries where this is done include Bhutan, Nepal, Germany, France, Italy, Brazil, Bulgaria, the US and Japan. In none of these countries it is possible for more than 70 percent of the source of funds to be unknown, but at present it is so in India,” said the report.

According to expenditure reports submitted to the EC, the BJP spent as much as Rs. 252 cr in the Assembly elections held in Assam, Puducherry, Tamil Nadu, West Bengal and Kerala. As per the party’s election expenditure statement submitted to the EC, Rs. 151.18 cr was used for the West Bengal poll campaign alone given how this was a state coveted the most by the BJP. The TMC submitted that it spent Rs. 154.28 cr on the West Bengal elections where it gave the BJP a sound drubbing.

BJP expenditure for other areas was as follows: Rs. 43.81 cr for Assam poll campaign, Kerala: Rs. 29.24 cr for Kerala poll campaign, Rs. 22.97 cr for Tamil Nadu poll campaign and Rs. 4.79 cr for Puducherry poll campaigns.

Considering the dubious sources of national parties’ incomes, the ADR endorsed the EC’s recommendation that only those political parties which contest and win seats in Lok Sabha/ Assembly elections should be awarded tax exemption. It also recommended that details of all donors who donate above Rs 2,000 be declared in the public domain.

“ADR supports ECI for its strong stand to enforce reforms in funding of political parties and hopes that these reforms are proactively taken up by the Government for implementation,” said the report.

Income sources of regional parties

On November 11, another ADR report said that over 55 percent of donations received by regional political parties in fiscal year 2019-20 came from “unknown sources” of which nearly 95 percent were sourced via electoral bonds.

When it comes to regional parties, the ADR report said 25 regional parties in the same fiscal year received up to Rs. 803.24 cr of donations. Rs 445.7 cr was attributed to “unknown” sources of which Rs. 426.233 cr (95.616 percent) was sourced via electoral bonds.  Meanwhile, Rs. 4.976 cr (1.116 percent) were attributed to voluntary contributions. This is much higher than the percentage of unknown sources of donations for national political parties – Rs. 3,377.41 cr or 70.98 percent of income.

Regional parties from southern states such as the TRS, TDP, YSR Congress Party, DMK and JD(S) topped the list of getting the highest incomes from “unknown” sources. The TRS received Rs. 89.158 cr, the TDP received Rs. 81.694 cr, the YSR Congress Party received Rs. 74.75 cr, while the DMK received Rs. 45.50 cr as donations. Another party that made this list was Odisha’s BJD party that got Rs. 50.586 cr as donation from unknown sources.

The ADR noted that political parties are not required to reveal the name of individuals or organizations donating less than Rs. 20,000. As a result, a substantial amount of funds cannot be traced and are from ‘unknown’ sources. Although national parties were brought under the RTI Act by the CIC ruling in June 2013, they have still not complied with the decision.

“Full transparency is, unfortunately, not possible under the current laws, and it is only the RTI that can keep citizens informed,” said the report. Accordingly, it advised that any organization that receives foreign funding should not be allowed to support or campaign for any candidate or political party.

“Mode of payment of all donations (above and below Rs. 20,000), income from sale of coupons, membership fees, etc. should be declared by the parties in the ‘Schedules’ of their audit reports, submitted annually to the I-T department and the ECI,” said the ADR report.

For FY 2018-19, total income of regional parties amounted to Rs. 885.956 cr, of which Rs. 481.276 cr or 54.32 percent came from unknown sources.

Related:

BREAKING: SC refuses to stay the sale of electoral bonds

SC expresses concern over the possible misuse electoral bonds, reserves its order on the matter

30 Assam election candidates face serious criminal cases: ADR

Sitaram Yechury raises concerns about EVMs, electoral bonds in letter to CEC

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The Association for Democratic Reforms (ADR), a non-partisan NGO working in the area of political and electoral reforms has released a report analysing the donations received by six major national political parties in the year 2016-17 and 2017-18 from corporate/business houses. The report titled ‘Analysis of Donations from Corporates & Business Houses to National Parties for FY 2016-17 & 2017-18’ analyses the sources, the type, the mode and the quantum of donations received by BharatiyaJanata Party (BJP), Indian National Congress (INC), Nationalist Congress Party (NCP), Communist Party of India (CPI), Communist Party of India-Marxist (CPM) and All India Trinamool Congress (AITC) in the two financial years (FY) preceding the election year. The report accounts for donation above Rs. 20,000 as political parties are required to submit details of only such donations to the Election Commission of India (ECI).

Major Findings:

• The report reveals that there has been a rise by 160% in donations above Rs.20,000 to national parties from corporates/business houses from 2004-12 to 2016-18.
• Parties received Rs. 378.89 cr in the period 2004-2012 and Rs. 985.18 cr in 2016-2018 alone.
• Between FY 2012-13 and 2017-18, donations from corporates to national parties increased by 414%, with a major drop in the percentage of corporate donations in FY 2015-16. The highest donations were in the FY 2014-15, during which the LokSabha elections were held.

• 93% of the total contribution to political parties from known sources came from corporates.
• BJP received the highest donations from corporates (94%) while CPI received the lowest (2%) in FY 2016-17 and 2017-18.
• Top three states from where maximum corporate donations were received, in FY 2016-17 & 2017-18, were Delhi (Rs 481.37 cr = 48.86%), Maharashtra (Rs 176.88 cr = 17.95%) and Karnataka (Rs 43.184 cr = 4.38%).

Party-Wise corporate donations:

• In FY 2016-17 and 2017-18, the 6 National Parties received a total of Rs 1059.25 cr via voluntary contributions above Rs 20,000 out of which Rs 985.18 cr (93%) was from corporates/ business houses alone.
• In FY 2016-17 & 2017-18, a total of 2061 corporate donations were received by national parties.
• The maximum number of donations were received by BJP, followed by INC, CPM, NCP, CPI and AITC.
• BJP declared receiving more than five times the total corporate donations (1731 donations) received by the rest of the 5 National Parties combined (330 donations) during the FY 2016-17 and 2017-18.

• BJP received the maximum donations of Rs 915.596 cr, which forms 94% of the total donations to the party above Rs 20,000 in FY 2016-17 and 2017-18.
• Between FY 2012-13 and 2017-18, BJP received the maximum corporate donations of Rs 1621.40 cr, constituting 83.49% of the total corporate donations in the six years
• INC declared a donation of Rs 55.36 cr (81%) from various corporate and business houses.
• CPI received the least amount of donations from the corporate sector, receiving a total of only Rs 4 lakhs (2%) from 7 donations.
• BSP has stated that the party received no donations above Rs 20,000 from any donor in FY 2016-17 and 2017-18.

The following tables give a brief of the amount and percentage of corporate donations received by national parties.

Categories of corporate donors:
The ADR report divides the corporate donations into 15 categories which includes Electoral Trusts, Manufacturing Companies, Real Estate, Power and Oil among others.

• Of the 985.18 cr corporate donations received between FY 2016-17 and 2017-18, Rs. 488.42 cr (49.58%) was received from Electoral trusts followed by Manufacturing companies (Rs. 120 cr = 12.18%), Real Estate (Rs. 90.57 cr = 9.19%) and the least was received from Education firms (Rs. 0.67cr = 0.07%).
• Further, Rs. 22.59cr (2.29%) was received from the unsegregated category, which includes companies with no details available online or those with no clarity regarding the nature of their work.

• The top 10 corporate donors in FY 2016-17 and 2017-18, led by Prudent/Satya Electoral Trust, gave donations to BJP with only 3 of them giving it to INC.

Mode of donations:

ADR report comprises of four modes of donations- Cheque/DD, Bank transfer, Cash and Incomplete and Undeclared sources.

• Overall, highest amount has been received through Cheque/DD (Rs 786.603 cr = 79.84%), followed by Bank Transfer (Rs 175.764 cr = 17.84%).
• Mode of payment is either incomplete or undeclared in case for 211 donations through which National Parties received Rs 22.81 cr, which forms 2.32% of the total amount of donations received by corporate/business houses.
• 52.96% (Rs 12.08 cr) of the total donations with Incomplete and undeclared mode of payment have been received by the INC alone while 124 donations or Rs 8.066 cr of the total donations with Incomplete or undeclared mode of payment was received by the BJP.
• 100% of corporate donations to AITC either have incomplete or undeclared mode of payment.

• A total of 916 donations through which National Parties received Rs 120.14 cr do not have address details in the contribution form.
• 98.77% of such donations worth Rs 118.66 cr without address details belong to the BJP.
• In case of 84 donations through which Rs 2.55 cr have been received, there is neither PAN detail, nor address is available.
• 98% of such donations worth Rs 2.50 cr without PAN and address details belong to the BJP.
• Overall, there were a total of 20 donations declared by National Parties in which there was absolutely no information related to PAN, address and incomplete details of the mode of payment of donations.

Recommendations of ADR
1. The Supreme Court gave a judgment on September 13, 2013, declaring that no part of a candidate affidavit should be left blank. Similarly, no part of the Form 24A submitted by political parties providing details of donations above Rs20,000, should be blank.
2. All donors who have donated a minimum of Rs 20,000 as a single or multiple donations should provide their PAN details.
3. Date on which the donation was made should be recorded by the party and submitted in Form 24A.
4. Any party which does not submit its donation statement to the ECI on or before 31st Oct should be heavily penalized and its income should not be tax-exempted.
5. A total of Rs 2.55 cr was collected by the National Parties from 84 corporate donors without obtaining their PAN and Address details. Such incomplete contributions reports must be returned to the parties by the ECI, to deter them from providing incomplete information.
6. Corporates should make details of their political contributions available in the public domain through their websites (in annual reports or in a dedicated page) for increasing transparency in political financing.
7. Annual scrutiny of donations reports of National, Regional and unrecognized parties should be initiated by a dedicated department of the CBDT, to discourage donations from shell companies or illegal entities.

Related Articles:

1. Electoral Bonds: SC directs all parties to reveal political funding details to EC
2. Should Political Funding in India be Transparent?
3. Foreign Funding for Political Parties: SC Issues Notices to Centre

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Image Courtesy: https://www.governancenow.com

After his budget speech in 2017, Arun Jaitley made promises to clean up the sale of electoral bonds and make political funding more transparent. It only made the process less transparent than before under the garb of donations being made by ‘cheque’ and not cash, claiming that no bank deposits could be black money if they were made in cheques.
 
There has been a significant change in how political parties are funded ever since the March and April sales of electoral bonds (EB’s). An RTI application for information on the buyers of EBs and the political parties that received them by Venkatesh Nayak, Programme Coordinator, CHRI (Commonwealth Human Rights Initiative,) was rejected by State Bank of India. They even sent the wrong data concerning EB sale in his RTI application and admitted they goofed up later on.
 
Full text of Venkatesh Nayak’s statement
Readers may recollect my despatch from June 2018 about the refusal of the State Bank of India (SBI) to disclose under The Right to Information Act, 2005 (RTI Act) information about the buyers of Electoral Bonds (EBs) and political parties which received them. The Central Public Information Officer (CPIO) denied information about buyers and the denominations of EBs they purchased, saying that compiling such information would lead to disproportionate diversion of the Bank’s resources.
 
He also decided that all reports sent to the Central Government about the sale and purchase of EBs were in “fiduciary capacity” and could not be disclosed under Section 8(1)(e) of the RTI Act. SBI’s CPIO provided only denomination-wise figures for the sale of EBs through the designated branches. Even this data did not match with the data the same CPIO had earlier supplied to Mr. Rakesh Reddy Dubbudu, of Factly.in and one of my fellow Co-Convenors of the National Campaign for People’s Right to Information (NCPRI). So I filed a first appeal with SBI’s First Appellate Authority (FAA) in July, 2018.
 
The SBI’s FAA has now admitted that the CPIO, SBI goofed up while providing the EB sale data against my RTI application. In his latest communication following the FAA’s order, the CPIO has stated that the EB sale data he provided for the Gandhinagar Branch earlier actually belonged to Bengaluru branch of SBI! (click here for my first appeal and the FAA’s order)

SBI’s FAA upholds CPIO’s rejection order mechanically
As the Hon’ble Union Finance Minister had claimed that EB Scheme would introduce greater transparency in political party funding, when he read out his budget speech in Parliament, in February 2017, (see paras # 164-165 of his speech), I decided to go on a “Quest for Transparency” – a highlight of the website of the Prime Minister’s Office. Readers will remember, after the Government launched the EB Scheme in January, 2018, SBI announced the first phase of sale of EBs in March, 2018. July 2018 saw the 4th phase of sale of EBs. After the 2nd phase of sale in April, 2018 was completed, I decided to ask for the following information in an RTI application sent to SBI in May, 2018:

“Apropos of the Government of India notifying your Bank as the “Authorised Bank” for the purpose of sale and encashment of Electoral Bonds Scheme, 2018, I would like to obtain the following information about the same under the RTI Act:
 
(i)  The denomination-wise total number of electoral bonds sold by each of your authorised branches in March and April 2018 along with the total number of buyers of each denomination;
(ii) The total number of buyers of electoral bonds in each category, namely, individuals, HUF, Company, Firm, Charitable Trust and Others who purchased electoral bonds from each of your authorised branches in March and April 2018;
(iii) A clear photocopy of all application forms received by your authorised branches against which electoral bonds were sold in March and April, 2018;
(iv) A clear photocopy of all redemption slips received and accepted by your authorised branches from every political party in relation to electoral bonds till date;
(v) The methodology applied by your Bank to ascertain whether or not a political party redeeming electoral bonds with any of your authorised branches had secured at least 1% of the votes polled during the last round of general elections to Parliament or the State Legislatures, till date;
 (vi) A clear photocopy of all Declarations of Beneficial Ownership received from companies purchasing electoral Bonds in March and April, 2018.
(vii) A clear photocopy of all returns or reports, by whatever name called, submitted by your Bank to the Government of India regarding the sale and encashment of electoral bonds till date; and
(viii) A clear photocopy of all returns or reports, by whatever name called, submitted by your Bank to the Reserve Bank of India regarding the sale and encashment of electoral bonds till date.”

Readers may click here to view the RTI documents and the preliminary analysis of the sale figures that the CPIO provided to me in June 2018. Now the CPIO has admitted that the 57 EBs he initially showed as having been sold through the Gandhinagar Branch in Gujarat, were actually sold through the Bengaluru branch of SBI in Karnataka. (click here for the CPIO’s latest communication) 
 
SBI sold 10 EBs of INR 1,00,000 denomination (Rs. 10 lakhs or 1 million), 38 EBs of INR 10,00,000 denomination (Rs. 3.8 crores or 38 million) and 9 EBs of INR 1,00,00,000 (Rs. 9 crores or 90 million) denomination totaling INR 12,900,000 (Rs. 12.93 crores or 129.3 million) through its designated branch in Bengaluru. 
 
The CPIO had earlier denied access to information about the beneficial ownership declarations submitted by companies and firms that bought EBs and the reports about EB sale submitted to the Central Government and the Reserve Bank of India (RBI) claiming that they were covered by Section 8(1)(e) of the RTI Act which applies to information held in a fiduciary relationship. SBI’s FAA mechanically “concurred” with the CPIO’s order without any detailed reasons. Except for stating that I had made my arguments based on RBI’s Master Circular and the Supreme Court’s explanation of how a RBI could not claim “fiduciary relationship” with the Banks it regulates, the FAA did not bother to examine the validity of the CPIO’s order against those arguments. 
 
 Para #25 of RBI’s July 2015 Master Circular states as follows:
 
“25. Customer Confidentiality Obligations
The scope of the secrecy law in India has generally followed the common law principles based on implied contract. The bankers’ obligation to maintain secrecy arises out of the contractual relationship between the banker and customer, and as such no information should be divulged to third parties except under circumstances which are well defined. The following exceptions to the said rule are normally accepted:
i.         Where disclosure is under compulsion of law
ii.         Where there is duty to the public to disclose
iii.         Where interest of bank requires disclosure and
iv.         Where the disclosure is made with the express or implied consent of the customer.”
So when SBI is in a contractual relationship with its customers, according to the RBI, its CPIO cannot claim the protection of “fiduciary” relationship as well. A fiduciary relationship is a trust-based relationship. This position has been clearly explained by the Supreme Court of India. 
 
In December 2015, in the matter of Jayantilal Ratanchand Shah & Ors., vs. Reserve Bank of India [(1996) 9 SCC 650], the Hon’ble Supreme Court rejected RBI’s claim that it stands in a “fiduciary” relationship with the Banks that it regulate. This ruling came in the context of information requests regarding non-performing assets (NPAs) and loan defaulters from public sector banks. The relevant paras from the judgement are reproduced below:
 
“58. In the instant case, the RBI does not place itself in a fiduciary relationship with the Financial institutions (though, in word it puts itself to be in that position) because, the reports of the inspections, statements of the bank, information related to the business obtained by the RBI are not under the pretext of confidence or trust. In this case neither the RBI nor the Banks act in the interest of each other. By attaching an additional “fiduciary” label to the statutory duty, the Regulatory authorities have intentionally or unintentionally created an in terrorem [in fear] effect….
 
59. RBI is a statutory body set up by the RBI Act as India’s Central Bank. It is a statutory regulatory authority to oversee the functioning of the banks and the country’s banking sector….
 
60. RBI is supposed to uphold public interest and not the interest of individual banks. RBI is clearly not in any fiduciary relationship with any bank. RBI has no legal duty to maximize the benefit of any public sector or private sector bank, and thus there is no relationship of ‘trust’ between them. RBI has a statutory duty to uphold the interest of the public at large, the depositors, the country’s economy and the banking sector. Thus, RBI ought to act with transparency and not hide information that might embarrass individual banks. It is duty bound to comply with the provisions of the RTI Act and disclose the information sought by the respondents herein.” 
 
62. The exemption contained in Section 8(1)(e) applies to exceptional cases and only with regard to certain pieces of information, for which disclosure is unwarranted or undesirable. If the information is available with a regulatory agency not in a fiduciary relationship, there is no reason to withhold the disclosure of the same. 

However, where information is required by mandate of law to be provided to an authority, it cannot be said that such information is being provided in a fiduciary relationship. As in the instant case, the Financial institutions have an obligation to provide all the information to the RBI and such an information shared under an obligation/ duty cannot be considered to come under the purview of being shared in fiduciary relationship.”
 
 It is only obvious that the same ratio will apply to SBI in its relationship with the RBI and the Government of India. There can be no ‘fiduciary’ relationship between them. 
 
SBI’s FAA refused to examine the correctness of the CPIO’s reply in light of the RBI’s Master Circular of July 2015 and the Apex Court’s ruling on the nature of “fiduciary relationship” in Jayantilal Mistry. The FAA also ignored my citation of case law, decided by the Central Information Commission twelve years ago, about the illegal practice of using Section 7(9) of the RTI Act for refusing access to information. He has upheld the CPIO’s decision to reject information about buyers of EBs by agreeing that such information is not available in compiled for and compiling it would disproportionately divert SBI’s resources. My argument that Section 7(9) cannot be used to reject an RTI application but must be used to facilitate access to the requested information in any other form were simply ignored by the FAA. The FAA chose to mechanically uphold the CPIO’s decision- an indication of a refusal to apply one’s mind despite compelling case law. He could have permitted file inspection but he chose not to so do. So much for the Quest for Transparency of political party funding through the sale of EBs.

Of course, soon, I will file a second appeal before he Central Information Commission against the orders of the CPIO and the FAA of SBI.
 
Electoral Bonds Scheme explained in brief
 
The EB Scheme allows any person (including HUF), company, firm, charitable trust or unincorporated body of individuals to buy EBs from the designated branches of SBI during each window of sale that the government announces from time to time. EBs are in the nature of promissory notes and carry no rate of interest. The identity of the buyer is not recorded on the EB. So the political party will have no formal mechanism to know who is the actual donor through EB. A buyer could send the EBs through his/her chauffeur to be delivered at the office of a political party. EBs have a validity of 15 days only. There is no limit on how many or how much worth of EBs any person can buy. Recipient political parties have to redeem the EBs within this period using an SBI account. The value of EBs will not be credited to any other bank where the political party may have an account.  If they miss the 15-day deadline neither the buyer nor the recipient political party gets the money back. Instead it will be deposited in the Prime Minister Relief Fund (see 3rd attachment for the Gazette notification of the EB scheme). 
 
Through the Finance Act, 2017, the Government of India made the following changes to the statutory scheme of political party funding :
 
1) Cash donations to political parties must not be more than Rs. 2,000/- from one donor;
 
2) Donations of any amount may be made to political parties through cheques, bank drafts or electronic transfers by individuals and companies, associations, trusts etc.;
 
3) The RBI Act, 1934 was amended to provide statutory recognition of electoral bonds
 
4) The Income Tax Act, 1961 was amended to relieve political parties from the obligation of reporting details of donations received through EBs to the tax authorities in order to continue to avail IT exemption;
 
5) The Representation of the People Act, 1951 was amended to relieve political parties from the obligation of maintaining the identity of donors who use EBs and disclosing the same to the Election Commission of India; and
 
6) The Companies Act, 2013 was amended to completely remove the cap on registered companies for making donations to political parties. Earlier, they could donate not mote than 7.5% of their net profit during the three preceding years and publicly disclose the same in their profit and loss at the end of the year. Thanks to the 2017 amendments which became operational in April 2018, a company can in theory donate its entire share capital to political parties soon after formation and then wind up. Limits on both time and amounts have been removed. Further, there is no duty place don companies to reveal the name of the political party to which they donate any amount of money, (let alone through EBs) in their profit and loss account).
 
So much for increased transparency in political party funding. Like I remarked a day after the EB idea was announced through the annual budget in February 2017, this is a backward leap to the era of secrecy and the new “transparent” system is proving it time and again.
 
Venkatesh Nayak is the Programme Coordinator, CHRI.
 
Related Articles: 
Should Political Funding in India be Transparent?
Foreign Funding for Political Parties: SC Issues Notices to Centre
Who are the Unknown Sources that the BJP Received 464.94 Crores From?

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These amendments were seen as an attempt to overturn the judgment passed by the Delhi High Court in March 2014 holding the two major political parties, BJP and INC, guilty of accepting foreign funding. The Delhi High Court ordered the Central Government and Election Commission of India to take action against BJP and INC within six months. (Click here for the copy of the judgment –  https://bit.ly/2KsTB0c ).

These amendments to the FCRA law have opened doors to unlimited political donations from foreign companies and also legitimizing financial contributions received from foreign sources. The petition was necessitated due to the intransigence of the Central Government in complying with the Delhi HC order of March 2014 and instead trying to get BJP and INC off the hook by amending the FCRA 2010 in 2016 and subsequently the FCRA 1976 in March 2018.

Prof. Jagdeep Chhokar, Founder Member & Trustee, ADR said, “I hope that the Supreme Court will strike down the amendments introduced in FCRA 2010 by Section 236 of Finance Act, 2016 and by Section 217 of the Finance Act, 2018 as void, illegal and unconstitutional”.

The petition may be read here:
 

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Analysis of Donations Received above Rs 20,000 by National Political Parties – FY 2016-17
 
This report, prepared by Association for Democratic Reforms (ADR) and National Election Watch (NEW), focuses on donations received by the National Political Parties, above Rs 20,000, during the Financial Year 2016-17, as submitted by the parties to the Election Commission of India (ECI). The National Parties include Bharatiya Janata Party (BJP), Indian National Congress (INC), Bahujan Samaj Party (BSP), Nationalist Congress Party (NCP), Communist Party of India (CPI), Communist Party of India (Marxist) (CPM) and All India Trinamool Congress (AITC).
 

Executive Summary

The executive summary below lists the key observations drawn from the report:

1. Donations above Rs 20,000 to National Parties from all over India (FY 2016-17)
   1. The total donations (above Rs 20,000) declared by the National Parties was Rs. 589.38 cr, from 2123 donations.
   2. A total of Rs 532.27 cr was declared by BJP from 1194 donations while INC declared receiving Rs 41.90 cr from 599 donations. The donations declared by BJP is more than nine times the aggregate declared by INC, NCP, CPI, CPM and AITC for the same period.
   3. BSP declared that the party did not receive any donations above Rs 20,000 during FY 2016-17, as it has been declaring for the past 11 years.

1. Comparison of donations received by National Parties during FY 2015-16 and FY 2016-17
   1. The total donations of the National Parties during FY 2016-17 increased by Rs 487.36 cr, an increase of 478%, from Rs 102.02 cr declared during the previous financial year, 2015-16.
   2. Donations to BJP increased from Rs 76.85 cr during FY 2015-16 to Rs 532.27 cr during FY 2016-17 (593% increase) while NCP has declared an increase of 793%, from Rs 71 lakhs in FY 2015-16 to Rs 6.34 cr in FY 2016-17.
   3. Donations to AITC increased by 231%, CPM and INC have declared increase of 190% and 105% respectively as per their donation reports for FY- 2015-16 and 2016-17, while that of CPI decreased by 9%.

 

1. Sources of income of National Parties – FY 2016-17

1. Total income of National Parties (as per their audit reports) for FY 2016-17 – Rs 1559.17 cr.
2. Total income of the National Parties from known donors (details of donors as available from contribution report submitted by parties to Election Commission): Rs 589.38 cr, which is 37.8% of the total income of the 7 National parties during FY 2016-17.
3. Total income of the parties from other known sources (e.g., sale of assets, membership fees, bank interest, sale of publications, party levy etc.): Rs 258.99 cr, or 16.61% of total income.

d)      Total income of the seven National Parties from unknown sources (income specified in the IT Returns whose sources are unknown), for the FY 2016-17 is Rs 710.80 cr, which is 45.59% of the total income of the parties from all over India.
 

* Other known income include: sale of moveable & immoveable assets, old newspapers, membership fees, delegate fee, bank interest, sale of publications and levy

1. Details of unknown sources of income as declared by the parties in their IT Returns

a)      Among the unknown sources of funding, maximum funds were collected under “Voluntary Contributions” by BJP during FY 2016-17. A total of Rs 464.84 cr was collected under this head which formed 99.98% of the total income from unknown sources of BJP.
b)      The most preferred unknown source of funding for INC was “Sale of coupons” under the party collected a total of Rs 115.64 cr which formed 91.69% of the party’s total income from unknown sources during FY 2016-17.
 
 

1. State-wise donations to National Parties – by Cash, cheque/ DD, bank transfers
   1. Segregation of donations according to State was made by ADR/NEW based on the address provided by the parties in their donations report to the ECI.
   2. A total of Rs 290.90 cr was donated to the National Parties from Delhi, followed by Rs 112.31 cr from Maharashtra and Rs 20.22 cr from Uttar Pradesh.
   3. A total of Rs 91.91 cr, (15.59% of total donations received by the National parties, FY 2016-17), could not be attributed to any State/ Union Territory due to incomplete information provided by the parties.

1. Donors from Corporates/ business sectors Vs. Individual donors
   1. 708 donations to the National Parties were made by corporate/business sectors amounting to Rs 563.24 cr (95.56% of total donations) while 1354 individual donors donated Rs 25.07 cr (4.25% of total donations) to the parties during FY 2016-17.
   2. 531 donations from corporate/business sectors were made to BJP (Rs 515.43 cr) while 663 individual donors donated Rs 16.82 cr to the party during FY 2016-17.
   3. INC received a total of Rs 36.06 cr via 98 donations from corporate/business sectors and Rs 5.84 cr via 501 individual donors during FY 2016-17.

1. Top donors to National Parties, FY 2016-17
   1. Satya Electoral Trust donated a total of Rs 265.12 cr to BJP and INC and is one of the top 2 donors to the two parties. The Trust donated Rs 251.22 cr to BJP (94.76% of total funds received by the party) and Rs 13.90 cr to INC (5.24% of total funds received by the party).
   2. NCP received Rs 2 cr donations from B.G. Shirke Construction Technology Pvt. Ltd. and Rs 1.10 cr from A.N. Enterprises Infra Services Pvt. Ltd.

Observations and Recommendations of ADR

Observations

1. Incomplete disclosure of information in the donations report: There is still ambiguity in details of donations declared by the National Parties for FY 2016-17. 
   1. Of the 7 National Parties, 4 parties, BJP, INC, CPI and CPM had not declared PAN details of 166 donations through which the parties collected a total of Rs 2.86 cr. INC collected Rs 1.69 cr from 88 donations but failed to provide PAN details of donors. One donation to BJP (Rs 1 lakh) and two donations to CPM (Rs 2.25 lakhs) did not have PAN details in their donations statements for FY 2016-17.
   2. AITC has not provided cheque number, bank on which it was drawn and the date on which the cheque was received/ encashed for any of its 12 donors who contributed a total of Rs 2.15 cr. Thus, without the complete cheque/DD details, it would be a time consuming process to link the donors against their donations and hence trace the money trail.

c)   CPI has also not declared the details of cheque and DD (cheque number, bank on which it was drawn and the date on) for a total of 33 donations through which the party received Rs 37.41 lakhs.
d)   CPI has not provided the names and PAN number of 56 donations of state secretaries and districts councils of the party though their contributions amount to Rs 1.04 cr while the party collected Rs 1.13 cr from 75 donations without PAN.
e)   BJP has collected Rs 1.54 cr from 26 donations without declaring Address and Mode of payments in its donations statement for FY- 2016-17.

1. Similar to the delay in submitting their audit reports to the Election Commission of India, the National Parties have failed to submit copies of their donations report before the deadline of 30^th Sept, 2017. BJP delayed its submission by 87 days while AITC submitted it on 27.10.2017, 26 days after the due date. CPM delayed its submission by 55 days BSP, CPI, NCP and INC filed their donations report before the due date.

Recommendations

1. The Supreme Court gave a judgment on September 13, 2013 declaring that no part of a candidate’s affidavit should be left blank. Similarly, no part of the Form 24A submitted by political parties providing details of donations above Rs 20,000 should be blank.
2. Full details of all donors should be made available for public scrutiny under the RTI. Some countries where this is done include Bhutan, Nepal, Germany, France, Italy, Brazil, Bulgaria, the US and Japan. In none of these countries is it possible for nearly 50% of the source of funds to be unknown, but at present it is so in India.
3. The National and Regional Parties should, ideally, lead by example by filing complete and correct statements of donations to the ECI well in time for public scrutiny so as to encourage financial transparency.

4.       The National and regional political parties must provide all information on their finances under the Right to Information Act. This will go a long way in0 strengthening political parties, elections and democracy. For more information, please refer to https://goo.gl/o1qFYT

The post Who are the Unknown Sources that the BJP Received 464.94 Crores From? appeared first on SabrangIndia.

 
The BJP’s current income is Rs 1,034.28 crore, nearly equal to the total income of all national parties in the previous year. The party’s income in 2015-16 was Rs 570.86 crore.
 
This is also the highest income the party, which has 273 seats in the Lok Sabha (Parliament’s lower house)–its highest ever–has generated in the last four years since 2014, according to an IndiaSpend analysis of yearly reports by the ADR.
 
Meanwhile, the Congress, which has 48 seats–its lowest ever–received its lowest income in four years.
 
The Congress earned Rs 225.36 crore in 2016-17, a drop of 13.8% from Rs 261.26 crore the previous fiscal year. Its share of total political party income dropped 10.8 percentage points, from 25.3% in 2015-16 to 14.5% in the current year.
 
The income of the seven national parties increased 50.9%, from Rs 1,033.18 crore in 2015-16 to Rs 1,559.17 crore in 2016-17.

 
While the BJP and Congress have the highest share of the total income earned by all political parties, both the Bahujan Samaj Party (BSP) and the National Communist Party (NCP) reported the highest percentage increase in income over the financial year to 2016-17.
 
The BSP’s income increased from Rs 47.38 crore to Rs 126.19 crore, while the NCP witnessed a rise in income from Rs 9.14 crore to Rs 173.58 crore between the financial years 2015-16 and 2016-17, increases of 266.3% and 88.6% respectively.
 
Along with the Congress, the income of the All India Trinamool Congress (AITC) and Communist Party of India – Marxist (CPM) declined 81.5% and 6.7%, respectively.
 
Major sources of income: Donations, contributions and coupons
 
Both the BJP and the Congress declared donations and contributions as their main source of income. While grants/donations/contributions made up 96.4% (Rs 997.12 crore) of the BJP’s income in 2016-17, they made up 22.5% (Rs. 50.6 crore) of the Congress’ income.
 
The largest share of income for the Congress came from issuing coupons of various denominations (worth Rs 100-500 and more) to party members and identified donors, for fundraising.
 
The coupons–which accounted for 51.3% (Rs 115.6 crore) of the party’s income in the year 2017–were introduced by a committee under former Prime Minister Manmohan Singh in 2001 to bring more transparency to the party’s fundraising process, the Hindu reported on December 22, 2001.
 
“However, these coupons are neither numbered nor can they be tracked, which makes it impossible to audit the contributions or where the income is coming from,” ADR’s founder-trustee Jagdeep Chhokar, a former professor and director of the Indian Institute of Management, Ahmedabad, told IndiaSpend. “All recommendations for issuing numbered coupons were rejected by the party, which eliminates transparency from the equation.”
 
Details of the donors and contributors were marked as “unavailable” or left blank on most disclosures filed by parties.
 

Source: Association for Democratic Reforms
 
The deadline for submitting the annual audited accounts for the parties was October 30, 2017. Four of seven national parties (BJP, Congress, NCP and CPI) have a record of consistently delaying audit reports over the past five years.
 
While the BJP and Congress delayed audit reports by an average of six months over the last five years year, for the current year, their submissions were delayed by almost three and five months, respectively.
 
BJP outspent Congress by 120.7% in 2016-17
 
While the BJP’s earnings have risen significantly, its expenditure has not kept pace over the four years to 2017.
 
While the BJP’s income over the 2016-17 increased 81.2%, as we said, its expenditure rose 61.8%. The highest year-on-year increase in the BJP’s expenditure was in 2014-15: up 177.9%, from  Rs. 328.51 crore in 2013-14 to Rs 913 crore in 2014-15.
 

However, in 2016-17, the Congress spent more than it earned.
 
Even with a nearly 14% drop in income in the year 2017, Congress expenditure rose 66.4% over the previous year. In contrast, during 2015-16, Congress expenditure fell 74.7%, from Rs 765.02 crore in 2014-15 to Rs 193.26 crore in 2015-16.
 
Election spending is main political expenditure
 
Elections and general propaganda accounted for the largest share (85.4% or Rs 606.64 crore) of the ruling party’s expenditure.
 
The Congress spent 46.5% (Rs 149.65 crore) of its expenditure on elections and 35.9% (Rs 116.7 crore) on administrative and general expenditure.
 

Source: Association for Democratic Reforms
 
(Prabhu is a data analyst with IndiaSpend.)

Courtesy: India Spend
 

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The Supreme Court today issued notices to the Centre and Election Commission of India on a petition filed on behalf of Association of Democratic Reforms (ADR) and Centre for Public Interest Litigation (CPIL) challenging various amendments made through the Finance Act 2017 and the Finance Act 2016 in the Companies Act, Income Tax Act, Representation of People’s Act, Reserve Bank of India Act and Foreign Contribution Regulations Act.

The petitioners had submitted that the these amendments in question had opened floodgates to unlimited corporate donations to political parties and anonymous financing by Indian and foreign companies, which can have serious repercussions on the Indian democracy. The said amendments have removed the caps on campaign donations by companies and have legalised anonymous donations. There was also no transparency in the donation process. The petition, filed through advocates Prashant Bhushan and Neha Rathi, also sought a direction that political parties must not be allowed to accept any cash donations.
 
“The Finance Act of 2017 has introduced the use of electoral bonds which is exempt from disclosure under the Representation of Peoples Act, 1951, opening doors to unchecked, unknown funding to political parties. The Finance Act, 2016 has also amended the Foreign Contribution Regulation Act (FCRA), 2010, to allow foreign companies with subsidiaries in India to fund political parties in India, effectively, exposing the Indian politics and democracy to international lobbyists who may want to further their agenda. These Amendments pose a serious danger to the autonomy of the country and are bound to adversely affect electoral transparency, encourage corrupt practices in politics and have made the unholy nexus between politics and corporate houses more opaque and treacherous and is bound to be misused by special interest groups and corporate lobbyists,” it said.

The petitioners also submitted that such wide-ranging amendments in various statutes were brought in illegally as a Money Bill, in order to bypass the Rajya Sabha.
 
The details of the amendments made to various statutes introduced through Finance Act, 2017 and Finance Act 2016 are:
1. Section 31, the Reserve Bank of India Act, 1934 through Part III, Section 135 of the Finance Act, 2017,
 
2. Section 29C, the Representation of the People Act, 1951 through Part – IV, Section 137 of the Finance Act, 2017,
 
3. Section 13A, the Income Tax Act, 1961 through Chapter III, Section 11 of the Finance Act, 2017 and in
4. Section 182 of the Companies Act, 2013 through Part-XII, Section 154, the Finance Act, 2017.
5. Section 2 of the Foreign Contribution Regulation Act, 2010 (FCRA) through Finance Act, 2016.
 
According to the petitioners, the above amendments were unconstitutional and violative of the doctrine of separation of powers and a citizen’s fundamental right to information, which are parts of the basic structure of the Constitution.
 
 

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मोदी सरकार ने अपने ताजा बजट में राजनीतिक फंडिंग के लिए नए तरह के प्रावधानों का ऐलान करते हुए दावा किया कि इससे यह व्यवस्था ज्यादा पारदर्शी हो जाएगी और राजनीतिक चंदे की प्रक्रिया लोगों की निगाहों में रहेगी। लेकिन इन प्रावधानों पर थोड़ा सा गौर फरमाते ही पता चलने लगता है कि मोदी सरकार ने उल्टा काम किया है। राजनीतिक फंडिंग और गैर पारदर्शी बना दी गई है। ऐसे प्रावधान किए गए हैं, जिससे राजनीतिक फंडिंग की पूरी व्यवस्था लोगों की नजरों से ओझल रहे।

पहली बात तो यह है कि इन प्रावधानों के तहत आरबीआई एक्ट में संशोधन होना है जो इस बात की इजाजत देगा कि कोई भी व्यक्ति या कंपनी कॉमर्शियल बैंकों से चुनावी बांड खरीद सकता है। ऐसे बांडों के जरिये दिए गए दान या चंदे की जांच नहीं होगी।

दरअसल, इस व्यवस्था के लिए जन प्रतिनिधित्व कानून, 1951 में जो संशोधन होना है, उसके तहत राजनीतिक दलों के लिए बांड खरीद कर चंदा देने वाले शख्स या कंपनी की ओर से अपनी पहचान जारी करने की अनिवार्यता खत्म हो जाएगी।

दूसरी बात यह है कि वित्त वर्ष 2017-18 के बजट में आयकर कानून में संशोधन की बात की गई है ताकि चुनावी बांडों को जरिये राजनीतिक दलों को मिलने वाले चंदे के बारे में हर साल इनकम टैक्स डिपार्टमेंट को जानकारी देने की बाध्यता खत्म हो जाए और उन्हें इनकम टैक्स में मिलने वाली छूट जारी रहे।

इन दोनों प्रावधानों का मिलाजुला असर यह होगा राजनीतिक पार्टियां चंदे या दान को जाहिर करने के लिए बिल्कुल बाध्य नहीं होंगी, जब तक यह रकम इलेक्ट्रॉनिक पेमेंट या चेक से न दी गई हो।

चौथी बात यह है जिस प्रक्रिया के तहत चुनावी चंदे की इस व्यवस्था में परिवर्तन किया जा रहा है, वह काफी पेचीदा और दिक्कत भरी होगी।

संविधान के अनुच्छेद 109 के मुताबिक वित्तीय विधेयक धन विधेयक (मनी बिल) है। धन विधेयक में संशोधन करने के लिए राज्यसभा के पास कोई अधिकार नहीं होता। हालांकि संविधान के अनुच्छेद 110 में धन विधेयक की स्पष्ट परिभाषा दी गई है। इसमें भारत की समेकित निधि से जुड़े और टैक्स लागू करने से जुड़े मामलों के अलावा और कोई मामला न तो शामिल किया जाना चाहिए और न ही किया जा सकता है।

इसका मतलब यह है यह सरकार लगातार अनुचित संवैधानिक कदम उठा रही है। हर बिल को मनी बिल के दायरे में लाकर यह राज्यसभा में बहस की स्वस्थ राजनीतिक व्यवस्था से बचने की कोशिश कर रही है।

कानूनों में संशोधन
चुनावी चंदों से जुड़े मकसदों को हासिल करने के लिए सरकार ने वित्त विधेयक में जिन कानूनों में संशोधनों का प्रस्ताव किया है वे इस तरह हैं। जो संशोधन होंगे, उन्हें स्पष्ट करने के लिए वित्त विधेयक का एक अंश यहां दिया जा रहा है-

3. रिजर्व बैंक अधिनियम 1934 में संशोधन

133- इस प्रवाधान में 1 अप्रैल, 2017 से संशोधन लागू हो जाएगा।
134. भारतीय रिजर्व बैंक अधिनियम 1934 के धारा 31 की उपधारा 2 के बाद निम्नलिखित उपधारा शामिल की जाएगी-
ये हैं-
(3)- जब तक कि कोई अन्य प्रावधान इसमें शामिल न हो, केंद्र सरकार किसी भी बैंक को चुनावी बांड जारी करने के लिए मान्यता दे सकती है।
स्पष्टीकरण – इस उपधारा के हिसाब से चुनावी बांड का अर्थ केंद्र सरकार की ओर से संभावित अधिसूचना के मुताबिक शेड्यूल बैंक द्वारा जारी बांड से है।
 दूसरे शब्दों में कहें तो आरबीआई एक्ट में संशोधन कर ऐसे बांड जारी करने की इजाजत देना है, जिसे कोई भी व्यक्ति या कंपनी वाणिज्यिक बैंकों से व्यक्ति या कंपनी खरीद सकती है।
 
2.आयकर अधिनियम 1961 में संबंधित संशोधन 
11. 1 अप्रैल, 2018 से आयकर कानून की धारा 13ए में यह प्रावधान शामिल हो जाएगा ( क्लॉज बी) – स्वैच्छिक योगदान शब्द के बाद चुनावी बांड के जरिये योगदान के अलावा शब्द जोड़ा जाएगा।
 
आखिर में आए शब्द ‘और’ को हटा दिया जाएगा।
 
क्लॉज सी में मौजूद शब्द  ‘और’ को हटा दिया जाएगा।
 
क्लॉज सी के बाद ये क्लॉज शामिल किए जाएंगे-राजनीतिक दलों की ओर से 2000 रुपये से अधिक का कोई भी योगदान बैंक अकाउंट पेई चेक या अकाउंट पेई बैंक ड्राफ्ट के तौर पर ही स्वीकार किया जाएगा। या फिर बैंक अकाउंट के जरिये इलेक्ट्रॉनिक सिस्टम का इस्तेमाल किया जाएगा। या फिर चुनावी बांड के जरिये ही चंदा स्वीकार किया जाएगा।  
 
स्पष्टीकरण- बांड का आशय रिजर्व बैंक अधिनियम 1934 में मौजूद धारा 31 की उपधारा (3) में वर्णित बांड की परिभाषा है।

आईटी एक्ट 1961 की धारा 13ए भारतीय चुनाव आयोग में रजिस्टर्ड पार्टियों की आय से संबंधित विशेष प्रावधानों से संबंधित है। आयकर की धारा 139 (4बी) में राजनीतिक पार्टियों को मिले योगदान की रिपोर्टिंग (सूचना ) का प्रावधान है।
 
साधारण शब्दों में कहा जाए तो आईटी एक्ट में इस तरह के संशोधन किए जाने हैं, जिससे चुनावी बांड के जरिये मिलने वाला चंदा इसके दायरे से बाहर रहे। हर साल इसके बारे में आयकर दफ्तर को बताना न पड़े और राजनीतिक दलों को इनकम टैक्स से छूट मिलती रहे।
 
जन प्रतिनिधित्व कानून 1951 में संशोधन
 
135. इस हिस्से के प्रावधान 1 अप्रैल, 2017 से लागू हो जाएंगे।
136. जन प्रतिनिधित्व कानून, 1951 की धारा 29सी की उप धारा (1) में निम्नलिखित चीजें शामिल की जाएंगी –
इस उपधारा के मुताबिक चुनावी बांड को राजनीतिक चंदे के तौर पर स्वीकार किया जाएगा।
 
स्पष्टीकरण– चुनावी बांड का अर्थ भारतीय रिजर्व बैंक अधिनियम 1934 की धारा 31 की उपधारा 3 में वर्णित बांड की परिभाषा से है।

जन प्रतिनिधित्व कानून, 1951 की धारा 29 सी (वाजपेयी युग में किया गया संशोधन ) का श्रेय एनडीए सरकार लेती है उसके तहत सभी मान्यता प्राप्त और राज्य स्तर राजनीति पार्टियों को 20000 रुपये से ऊपर के हर चंदे का खुलासा करना होगा। भारतीय चुनाव आयोग हर साल राष्ट्रीय राजनीतिक दलों को मिले चंदे की रिपोर्ट जारी करता है। राज्य की मान्यता प्राप्त पार्टियों को मिले चंदे की रिपोर्ट भी जारी की जाती है। यह जानकारी आयोग की वेबसाइट पर जारी होती है यह भी बताया जाता है कि यह चंदा पार्टी को कब मिला।

 द एसोसिएशन फॉर डेमोक्रेटिक रिफॉर्म्स Association for Democratic Reforms ने हाल में 2015-16 के दौरानर राजनीतिक दलों को मिले चंदे पर एक विस्तृत रिपोर्ट प्रसारित की है। प्रिंट और इलेक्ट्रॉनिक मीडिया में इस रिपोर्ट से जुड़ी कई खबरें आई हैं।

दूसरे शब्दों में कहें तो जनप्रतिनिधित्व कानून 1951 में होने वाले बदलावों के बाद कॉमर्शियल बैंकों से चुनावी बांड खरीदने वाले लोगों और कंपनियों के नामों के खुलासे की बाध्यता नहीं रह जाएगी। 

इस तरह देखा जाए तो चुनावी बांडों के जरिये राजनीतिक दलों के चंदे की व्यवस्था गैर पारदर्शी बना दी गई है। अगर इसे संसद से मंजूरी मिल जाती है तो आयकर कानून, आरबीआई कानून और जन-प्रतिनिधित्व कानून तीनों में सम्मिलित बदलाव से इस तरह की स्थितियां पैदा होंगी-

• ज्यादातर राजनीतिक पार्टियां नकद में 2000 रुपये से कम का चंदा हासिल करने की कोशिश करेंगी। क्योंकि जनप्रतिनिधित्व कानून की धारा 29 सी के तहत 20,000 या उससे ऊपर के चंदे के  बारे में आयकर विभाग बताना होता है। अब 2000 से नीचे के चंदे के बारे में जानकारी देने की बाध्यता नहीं रहेगी।
• चूंकि चुनावी बांड के जरिये हासिल चंदा आयकर विभाग या चुनाव आयोग के चुनावी चंदे की रिपोर्ट में शामिल नहीं होगा, इसलिए इसकी रिपोर्टिंग भी नहीं होगी। 
• सिर्फ चेक या डिजिटल मोड के जरिये 20,000  रुपये के चंदे की रिपोर्टिंग ही इनकम टैक्स डिपार्टमेंट या चुनाव आयोग को होगी। 
• कुल मिलाकर इन तमाम संशोधनों का असर यह होगा कि राजनीतिक दल अब चुनावी चंदे या आर्थिक योगदान के खुलासे के लिए बिल्कुल बाध्य नहीं होंगे, जब तक कि यह योगदान इलेक्ट्रॉनिक मोड या चेक से नहीं किया जाए।

The post जेटली ने चुनावी चंदे के प्रावधान और संदिग्ध किए appeared first on SabrangIndia.

Contrary to the claims by the Modi regime that the proposal in Finance Minister 2017-2018 budget will make the funding to political parties more transparent, a close look at the proposals disclose the opposite: funding has been made opaque and the political parties therefore protected from public scrutiny.
 
One, the RBI Act is sought to be amended to allow for the issuance of electoral bonds that individuals and companies can buy through commercial banks. Donations made through such electoral bonds are exempt from scrutiny. In effect, the implication of the amendments proposed to the RP Act, 1951 is that political parties will not be required to disclose the identity of individuals and companies who make donations through electoral bonds bought from the commercial banks.
 
Two, under the 2017-2018 Budget, the IT Act is sought to be amended to exclude donations received by these political parties through "electoral bonds from being reported to the IT Department every year in order for them to continue to avail the exemption from paying income tax.
 
Three, the combined effect of the amendments is that political parties will be under no obligation to disclose any donation or contribution that they receive at all, unless it is made electronically or through cheques.
 
Four, the process through which these changes are proposed to be made are also hugely problematic. The Finance Bill is a Money Bill within the meaning of that term under Article 109 of the Constitution. Rajya Sabha being the Upper House has no powers to vote on make any amendments in money Bills. However the definition of "Money Bill" as provided in Article 110 of the Constitution is crystal clear. It cannot and must not include matters other than those relating to the imposition of taxes or matters related to the Consolidated Fund of India.
 
This means that this regime, by constantly committing Constitutional improprieties by bringing any and every Bill as a Money Bill is doing so to escape healthy democratic debate in the Rajya Sabha.
 
 
Detailed Analysis Below:
 
An analysis of what the Government is proposing and what it means for transparency of political party funding is given below for readers to understand better without having to trawl through the Finance Bill, 2017. In short, if the amendments are approved by Parliament, political party funding is likely to become largely opaque in future.
 
Here is why:
 
What did the Union Finance Minister actually say?
 
The extract from the speech of the Hon'ble Finance Minister made in the Lok Sabha on the subject of transparency of electoral funding is reproduced word for word below:
 
"Transparency in Electoral Funding
 
164. India is the world’s largest democracy. Political parties are an essential ingredient of a multi-party Parliamentary democracy. Even 70 years after Independence, the country has not been able to evolve a transparent method of funding political parties which is vital to the system of free and fair elections. An attempt was made in the past by amending the provisions of the Representation of Peoples Act, the Companies Act and the Income Tax Act to incentivise donations by individuals, partnership firms, HUFs and companies to political parties. Both the donor and the donee were granted exemption from payment of tax if the accounts were transparently maintained and returns were filed with the competent authorities. Additionally, a list of donors who contributed more than `20,000/- to any party in cash or cheque is required to be maintained. The situation has only marginally improved since these provisions were brought into force. Political parties continue to receive most of their funds through anonymous donations which are shown in cash.
 
165. An effort, therefore, requires to be made to cleanse the system of political funding in India. Donors have also expressed reluctance in donating by cheque or other transparent methods as it would disclose their identity and entail adverse consequences. I, therefore, propose the following scheme as an effort to cleanse the system of funding of political parties:
 
a) In accordance with the suggestion made by the Election Commission, the maximum amount of cash donation that a political party can receive will be `2000/- from one person.
b) Political parties will be entitled to receive donations by cheque or digital mode from their donors.
c) As an additional step, an amendment is being proposed to the Reserve Bank of India Act to enable the issuance of electoral bonds in accordance with a scheme that the Government of India would frame in this regard. Under this scheme, a donor could purchase bonds from authorised banks against cheque and digital payments only. They shall be redeemable only in the designated account of a registered political party. These bonds will be redeemable within the prescribed time limit from issuance of bond.
d) Every political party would have to file its return within the time prescribed in accordance with the provision of the Income-tax Act.
 
Needless to say that the existing exemption to the political parties from payment of income-tax would be available only subject to the fulfilment of these conditions. This reform will bring about greater transparency and accountability in political funding, while preventing future generation of black money." [emphasis supplied]
 
The sub-heading related to political party funding and the last sentence of this section of the Hon'ble Finance Minister's speech indicate that the moves proposed are for greater transparency in political party funding.
 
 
What amendments to which law are actually being proposed?
In order to achieve the aforementioned objectives the Finance Bill proposes to amend the following laws in the following manner. The extracts from the Finance Bill are reproduced below along with a brief explanation of what they imply
 
I. AMENDMENTS TO THE RESERVE BANK OF INDIA ACT, 1934 
"133. The provisions of this Part shall come into force on the 1st day of April, 2017. 
 
134. In the Reserve Bank of India Act, 1934, in section 31, after sub-section (2), the following sub-section shall be inserted, namely:— 
"(3) Notwithstanding anything contained in this section, the Central Government may authorise any scheduled bank to issue electoral bond. 
 
Explanation.–– For the purposes of this sub-section, ‘’electoral bond’’ means a bond issued by any scheduled bank under the scheme as may be notified by the Central Government.’’. [emphasis supplied]
 
In other words, the RBI Act is sought to be amended to allow for the issuance of electoral bonds that individuals and companies can buy through commercial banks.
 
 
II. RELEVANT AMENDMENTS TO THE INCOME TAX ACT, 1961
"11. In section 13A of the Income-tax Act, with effect from the 1st day of April, 2018,—
(I) in the first proviso,—
(i) in clause (b),—
(A) after the words “such voluntary contribution”, the words “other than contribution by way of electoral bond” shall be inserted;
(B) the word “and” occurring at the end shall be omitted;
 
(ii) in clause (c), the word “; and” shall be inserted at the end;
 
(iii) after clause (c), the following clause shall be inserted, namely:—
‘(d) no donation exceeding two thousand rupees is received by such political party otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account or through electoral bond.
 
Explanation.––For the purposes of this proviso, “electoral bond” means a bond referred to in the Explanation to sub-section (3) of section 31 of the Reserve Bank of India Act, 1934.’;
 
(II) after the second proviso, the following proviso shall be inserted, namely:—
“Provided also that such political party furnishes a return of income for the previous year in accordance with the provisions of sub-section (4B) of section 139 on or before the due date under that section.”. [emphasis supplied]
 
Section 13A of the IT Act, 1961 relates to special provisions regarding the income reported by political parties registered with or recognised by the Election Commission of India. Section 139(4B) of the IT Act contains the reporting requirement for political parties.
 
In simpler terms, the IT Act is sought to be amended to exclude donations received by these political parties through "electoral bonds from being reported to the IT Department every year in order for them to continue to avail the exemption from paying income tax.
 
 
III. AMENDMENTS TO THE REPRESENTATION OF THE PEOPLE ACT, 1951 
"135.The provisions of this Part shall come into force on the 1st day of April, 2017. 
 
136. In the Representation of the People Act, 1951, in section 29C, in sub-section (1), the following shall be inserted, namely:–– 
‘Provided that nothing contained in this sub-section shall apply to the contributions received by way of an electoral bond. 
 
Explanation.––For the purposes of this sub-section, “electoral bond” means a bond referred to in the Explanation to sub-section (3) of section 31 of the Reserve Bank of India Act, 1934." [emphasis supplied]
 
Section 29C of the RP Act, 1951 for which the NDA Government claims credit during the Vajpayee-era requires all recognised national and State level political parties to make annual declarations of contributions received from individuals and companies in excess of Rs. 20,000/- The Election Commission of India publicises the contribution reports of recognised national political parties as well as those of the recognised State political parties on its website as and when it receives them. The Association for Democratic Reforms has recently disseminated a detailed analysis of the donor reports submitted by political parties for the financial year 2015-16. The findings were recently reported widely in the print and electronic media.
 
In other words, the import of the amendments proposed to the RP Act, 1951 is that political parties will not be required to disclose the identity of individuals and companies who make donations through electoral bonds bought from the commercial banks.
 
 
Justification for these amendments provided in the Finance Bill, 2017
The Finance Bill contains the following justifications for amending these three laws:
 
Justification for amending the RBI Act:
 
"Clauses 133 and 134 of the Bill seek to amend section 31 of the Reserve Bank of India Act, 1934 relating to issue of demand bills and notes.
It is proposed to insert a new sub-section (3) to the said section so as to provide that the Central Government may authorise any scheduled bank to issue electoral bond as
referred to in the proposed clause (d) of the first proviso to section 13A of the Income-tax Act.
 
It is also proposed to define the expression “electoral bond”.
 
This amendment is consequential in nature.
 
This amendment will come into force from 1st April, 2017." [see page 83 of the Finance Bill]
 
 
Justification for amending the IT Act:
"Clause 11 of the Bill seeks to amend section 13A of the Income-tax Act relating to special provision relating to incomes of political parties… 
 
It is proposed to amend the said section so as to provide, inter alia, that political party shall be eligible for exemption of income-tax under section 13A if,—
(i) no donation exceeding two thousand rupees is received otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of
electronic clearing system through a bank account or through electoral bond;
 
(ii) it furnishes a return of income for the previous year in accordance with the provisions of sub-section (4B) of section 139 on or before the due date as per section 139.
It is further proposed to provide that any contributions received by way of electoral bond shall be excluded from reporting as per clause (b) of said section.
It is also proposed to define the expression “electoral bond”.
 
These amendments will take effect from 1st April, 2018 and will, accordingly, apply in relation to the assessment year 2018-2019 and subsequent years." [see page 63 of the Finance Bill]
 
Justification for amending the RPA Act:
"Clauses 135 and 136 of the Bill seek to amend section 29C of the Representation of the People Act, 1951 relating to declaration of donation received by the political parties.
Sub-section (3) of section 29C of the Representation of the People Act, 1951, inter alia, provides that every political party shall furnish a report to the Election Commission with
regard to the details of contributions received by it in excess of twenty thousand rupees from any person in order to avail the income-tax relief as per the provisions of Income-tax
Act,1961.
 
It is proposed to provide that the contributions received by way of "electoral bond" shall be excluded from the scope of sub-section (3) of section 29C of the said Act. It is also
proposed to define the term "electoral bond" which is consequential in nature.
 
This amendment will take effect from 1st April, 2017." [see page 83 of the Finance Bill]
 
 
Electoral bonds have the potential to make political party funding largely opaque
If approved by Parliament, the combined effect of the amendments to the RBI Act, the IT Act and the RP Act is likely to be as follows:
 
1) Many political parties are likely to strive to receive cash donations below Rs. 2,000 only. Thanks to Section 29C of the RP Act which applies to donations of Rs. 20,000 or above only, these will not be required to be reported to the IT Department or to the Election Commission of India.
 
2) As donations received through electoral bonds are exempt from being included in the annual reports of political parties to the IT Department or the Election Commission of India, these amounts will also not be reported.
 
3) Only such contributions received about Rs. 20,000 through cheques or digital mode of payment will be required to be reported to the IT Department and the Election Commission of India.
 
So the combined effect of the amendments is that political parties will be under no obligation to disclose any donation or contribution that they receive at all, unless it is made electronically or through cheques.
 
 
Keeping the Rajya Sabha out of the decision-making loop
The process through which these changes are proposed to be made are also hugely problematic. the Finance Bill is a Money Bill within the meaning of that term under Article 109 of the Constitution. Rajya Sabha being the Upper House has no powers to vote on make any amendments in money Bills. However the definition of "Money Bill" as provided in Article 110 of the Constitution is crystal clear. It cannot and must not include matters other than those relating to the imposition of taxes or matters related to the Consolidated Fund of India. The amendments proposed to the RBI Act, the IT Act and the RP Act clearly do not fall within this criteria. So once again the Government is trying to bulldoze amendments to other laws through legislation labelled 'money bill to prevent any actionable dissent in the Rajya Sabha. The political parties connived to a similar action in 2016 when the Foreign Contribution Act was amended to permit political parties to receive donations from Indian subsidiaries of MNCs. That proposal was also pushed through a Finance Bill. This is grave constitutional impropriety to say the very least and seems to be becoming a habit.
 
Is this a step forward in political party funding or a leap backward into the era of secrecy ordained by law (and not absence of a law as was the case earlier), readers may decide for themselves. 
 
As political parties are refusing to be covered under The Right to Information Act despite a June 2013 order of the Central Information Commission, citizens will not be able to access information about political funding through that channel either. So while the regulating agencies like the IT Department and the Election Commission are deprived of their powers to make political party funding transparent, citizens will also not have any means to find out which party has collected how much money and form whom. The entire exercise of demonetisation is also not likely to help bring in any transparency in the funding of political parties. 
 
The Finance Minister seems to have gone back on his promise that the Government would implement every word of the Hon'be Prime Minister's speech made on new year's eve, where the PM assured the country about taking the lead to clean up political party funding.
 
 
While presenting the budget in the Lok Sabha (Lower House of Parliament) yesterday, the Hon'ble Finance Minister made some announcements about the manner in which he sought to make donations to political parties more transparent. If the proposals to amend the relevant laws are approved by Parliament, from April 2017 onwards, donations in cash can be made up to Rs. 2,000 only by any person; payments of higher value will be permitted only through cheques or digital mode and donors will be able to buy 'electoral bonds' that will be sold through commercial banks under the regulations made by the Reserve Bank of India. Some commentators have hailed this as a major step forward while some of us have expressed skepticism about this initiative.

The post Funding to Political Parties made more Opaque: Jaitley Budget 2017 appeared first on SabrangIndia.

बीजेपी ने यह विज्ञापन एसोसिएशन फॉर डेमोक्रेटिक राइट्स(ADR) की जिस रिपोर्ट के आधार पर तैयार किया है,उसमें बीजेपी से लेकर कांग्रेस,शिरोमणी अकाली दल और आम आमदी पार्टी सहित 48 दलों के खातों का हिसाब है। रिपोर्ट में कहा गया है कि अज्ञात सोर्स से होने वाली आमदनी लगातार बढ़ रही है। पिछले दस सालों में 313 प्रतिशत का इजाफा हुआ है। क्षेत्रिय दलों में अज्ञात सोर्स से आमदनी में 600 प्रतिशत से अधिक का इजाफा हुआ है। राष्ट्रीय दल की आमदनी का 70 फीसदी हिस्सा अज्ञात सोर्स से आता है।

बीजेपी के इस विज्ञापन के हिसाब से बसपा अपने दानकर्ताओं के बारे में नहीं बताती है। चंदे में मिलने वाली सारी रकम 20,000 रुपये से कम की होती है जिससे वह दानकर्ता के नाम बताने के कानूनी दायित्व से मुक्त हो जाती है। आयकर कानून में ही यह प्रावधान है कि 20,000 रुपये से कम की राशि होगी तो आय का ज़रिया बताने की ज़रूरत नहीं है। इस हिसाब से राजनीतिक दल कोई कानून नहीं तोड़ते बल्कि इस कानून का लाभ उठाकर दानकर्तांओं या आमदनी का ज़रिया बताने से बच जाते हैं। यह काम सिर्फ बसपा ही नहीं करती बल्कि हाल फिलहाल वजूद में आई आम आदमी पार्टी भी करती है। कांग्रेस और बीजेपी तो इस खेल के कप्तान हैं।

हमने एडीआर की रिपोर्ट पर मीडिया रिपोर्टिंग देखी। ज़्यादतर रिपोर्ट में बसपा के इस 100 फीसदी को बड़ा करके छापा गया है। एक या दो अख़बार में ही इस बात का ज़िक्र मिला कि 100 फीसदी अज्ञात सोर्स से आमदनी करने वाली बसपा की कुल आमदनी कितनी है। बीजेपी के इस भ्रामक विज्ञापन की असलीयत समझने के लिए यह जानना ज़रूरी है कि अगर बसपा को अज्ञात सोर्स से सौ करोड़ मिले हैं तो बाकी दलों को क्या बिलकुल नहीं मिले हैं?

एडीआर के अनुसार 2004-05 से 2014-15 के बीच बसपा की ज्ञात सोर्स से आमदनी 5.19 करोड़ से बढ़कर 111.96 करोड़ हो जाती है। बसपा ने एक रुपये की राशि का हिसाब ज्ञात सोर्स से नहीं दिया है। यानी उसकी सौ फीसदी आमदनी अज्ञात सोर्स से होती है। क्या आप जानते हैं या बीजेपी ने इस विज्ञापन से बताया है कि अज्ञात सोर्स से सबसे अधिक कमाई किसकी होती है? जिस एडीआर की रिपोर्ट के सहारे बीजेपी ने सपा-बसपा को भ्रष्ट कहा है, उसमें दूसरे नंबर पर भाजपा है और पहले नंबर पर कांग्रेस है।कांग्रेस की आमदनी का 83 फीसदी हिस्सा अज्ञात सोर्स से आता है यानी 3,329 करोड़ रुपये। बीजेपी की आमदनी का 65 फीसदी हिस्सा अज्ञात सोर्स से आता है यानी 2,126 करोड़ रुपया। समाजवादी पार्टी की 94 फीसदी आमदनी अज्ञात सोर्स से होती है यानी 766 करोड़।

बीजेपी के अनुसार अगर अज्ञात सोर्स से 112 करोड़ कमाने वाली बसपा भ्रष्ट है तो अज्ञात सोर्स से 2126 करोड़ कमाने वाली बीजेपी क्या है। 100 करोड़ और 2000 करोड़ में फर्क होता है या नहीं होता है। क्या अज्ञात सोर्स से 2126 करोड़ की आमदनी करने वाली बीजेपी ईमानदार कही जाएगी? क्या बीजेपी अज्ञात सोर्स से 3,329 करोड़ की आमदनी करने वाली कांग्रेस को महाईमानदार मानती है? बीजेपी ने ही एडीआर की रिपोर्ट के आधार पर पैमाना बनाया है इसलिए जवाब भी उसी को देना चाहिए। बीजेपी ने किस हिसाब से ख़ुद को और कांग्रेस को इस पोस्टर से ग़ायब कर दिया है और बसपा-सपा को भ्रष्ट घोषित कर दिया है।

इस भ्रामक विज्ञापन के पीछे क्या यह मंशा रही होगी कि बसपा के न तो प्रवक्ता हैं न उनका कोई मीडिया सेल है इसलिए वो तो जवाब नहीं दे पायेंगे। कांग्रेस का नाम लेंगे तो प्रेस कांफ्रेंस भी हो जाएगा और वह छपेगा भी। इसके अलावा तो कोई कारण समझ नहीं आता है। यूपी बीजेपी का यह राजनीतिक विज्ञापन नोटबंदी के दौरान प्रधानमंत्री के उन आश्वासनों का भी अनादर करता है जब उन्होंने कहा था कि वे राजनीतिक दलों की फंडिंग पर खुली चर्चा चाहते हैं। हालांकि राजनीतिक दलों की फंडिंग पर कई साल से खुली चर्चा हो रही है, तमाम तरह की रिपोर्ट है फिर भी चर्चा की यह भावना कहीं से ठीक नहीं है कि एडीआर की रिपोर्ट का एक हिस्सा लेकर दूसरे दलों को भ्रष्ट ठहराया जाए और उसी रिपोर्ट में ख़ुद के ज़िक्र पर चुप रहा जाए। जाने अजनाने में बीजेपी ने इस विज्ञापन के ज़रिये एक अच्छा काम भी कर दिया है। यह स्वीकार किया है कि अज्ञात सोर्स से आमदनी राजनीतिक भ्रष्टाचार का ज़रिया है। एडीआर की रिपोर्ट का यह राजनीतिक इस्तमाल एडीआर के काम की विश्वसनीयता का प्रमाण बन गया है, भले ही राजनीतिक दल साल दर साल एडीआर की रिपोर्ट को अनदेखा करते रहे हों।

Courtesy: naisadak.org

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