Editorial of the Day (15th Mar): Political Funding

Political Funding Background

• Supreme Court Verdict: Declared the electoral bonds scheme unconstitutional and mandated SBI to provide relevant data to the Election Commission.
• Public Disclosure: The Election Commission is set to make the data public, raising questions about potential improprieties among corporate donors and recipients.
• Donor-Recipient Matching: SBI acknowledged the possibility of matching donors to recipients by June, which could clarify the existence of any quid pro quo.
• Influence on Elections: The issue of political financing is significant due to its impact on the integrity of democracy.

Past Political Funding and Transparency

• Historical Opaqueness: Before 2018, 70% of political donations were made in cash, and only donations above Rs 20,000 were reported to the EC.
• Income Tax Rebates: Such reported donations qualified for income tax rebates upon EC verification.
• Post-Electoral Bonds Secrecy: The introduction of electoral bonds brought complete secrecy over political donors and recipients.

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Alternatives to Electoral Bonds

• Indrajit Gupta Committee Proposal: Recommended partial public funding of political parties contingent on internal democracy.
• State Funding of Elections: Mentioned as a potential solution, but it has drawbacks like the rise of non-serious candidates.
• Funding Based on Electoral Performance: Proposes state funding of political parties based on votes received at Rs 100 per vote.

Enhancing Transparency and Integrity

• Auditing Party Accounts: Political party accounts should be audited by independent auditors from a panel provided by the EC or CAG.
• National Election Fund: Suggested as a repository for corporate and private donations with income tax benefits.
• Protection from Reprisal: The fund would prevent corporate donors from facing harassment by ruling parties.

Global Practices and Feasibility

• International Models: According to a study, 71 nations provide state funds to political parties based on vote counts.
• Prevalence: This funding model is widespread in European, African, American, and Asian countries.
• Applicability to India: The success of this model in various countries suggests its potential effectiveness in India.

Moving Forward

• Public Cost Justification: Argues that the expense to the public is justified by the benefits of honest and transparent governance.
• Possible Cess Solution: Suggests implementing a small cess, like one paisa per litre of petrol, to fund political parties.
• Electoral Trusts: Existing trusts lack transparency, with the Reuters report revealing serious issues.
• Need for Debate: Calls for a discussion on the future of political financing and the operational details of the proposed solutions.

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