Finance Bill 2017: Corporate political funding gets legally anonymous

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New Delhi, March 24: With clearance of Finance Bill in Lok Sabha on Wednesday, Modi government has just made political funding legally anonymous and opaque in the country.

Contrary to what Finance Minister Arun Jaitely had said in the parliament during the budget speech, the government has stepped against its promise of rooting out black money and doling out transparency in Indian Political System.

In his Budget speech on Feb 1, Jaitley had lamented that “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.”

Citing power of transparency and digital transactions, Jaitley thus stated that, “an effort is required to be made to cleanse the system of political funding in India.”

However on Wednesday, the Finance Bill proposed amendments to The Companies Act and The Representation of People’s Act to ease up route to corporate funding to political parties.

The government has proposed to remove the current cap or limit on making donations of profits to political parties. Currently companies could fund political parties up to 7.5 % of the average of its net profits in the last three financial years. Besides they were bound to disclose the contributions to the political parties in its balance sheet.

But, now government as per the new amendment the corporate entities are no longer bound to disclose the name of the political party in their Profit and Loss account. Now the company only needs to mention the amount contributed under the category and no names should be asked.

That means: A corporate entity can donate as much amount to a political party (as it wants as per its vested interests, if any) while legally skipping the details of the benefitted shareholder(s) or general public (name of the politician or a political party).

The change in Companies Act is passed in the Lok Sabha without any delay by the opposition. Partners in Crime or brother in arms, whatever you call it, dirty politics it is after all.

Besides cheques, bank draft or electronic mode, the bill also proposes donation to political parties via any notified instrument. Government has proposed to bring electoral bonds for funding of political parties.

Electoral bonds are like any other financial instrument such as promissory notes or bearer bonds. Anyone interested in donating to political party can buy these bonds from a notified bank, and then deposit them in an account listed out by a political party.

By providing alternative currency to pay to political parties, how would government clean electoral funding? The government’s explanation is- this will ensure only white money is being added to the electoral bonds.

But with another amendment in the Finance Bill pertaining to the Representation of People’s Act – government has also ensured at the same time, that electoral bonds are anonymous. Those buying these bonds do not have to record who they are, it says.

So, more power to political funding in India! More anonymous funds for political parties the legal way!

Even last year the central government brought in changes in the Finance bill to allow political parties to receive foreign funds. On March 28, 2014 Delhi high had indicted BJP and Congress for receiving foreign funds in violation of provisions of Foreign Contribution (Regulation) Act (FCRA).

On March 21, 2017, Delhi High Court issued a show-cause notice to the Union Home Ministry for not following its earlier order and taking directed action against BJP and Congress for accepting donations from “foreign sources.” Court was hearing a contempt petition following the inaction of the centre as per the previous orders.

The current amendments would naturally help large party with close connections to corporations and a substantial support base outside the country. They would benefit and work together, hand in gloves.

A senior CAG officer while speaking to The Telegraph said: This means, for example, that an infrastructure firm could theoretically pay up to 50 percent of its net profits to a single party as donation without anyone getting wiser as to which party has been paid… this throws open the possibility that an order to build a highway or a railway bridge could be given to a firm and that firm could pay the donation to the party in power which placed the order with it…The beauty is that if this happens, it will be legitimate and no questions can be asked by any ethics committee of Parliament or by any CAG audit.

On one hand government is forcing the public to embrace transparency in his day to day dealings, the same is not being applied to the political parties. Being a money bill, these amendments won’t require the Rajya Sabha nod.

While government on Wednesday reiterated its intention to reduce the black cash in Indian politics, the amendments which are now bound to be part of coming days would make it much easier for corporate Houses to pump large amounts of money into political parties without having to declare them.

The Modi government that stashed off 86% of country’s cash with a short notice of 4 hours on November 8 in a bid to clean the system and forced digital drive on its 125 crore people was expected to fair better in the parliament on the issue of corruption in political parties.

Wefornews Bureau

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