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Throttle the ‘insatiable vice’ of corruption

LiveMint logoLiveMint 23-02-2017 Bhartruhari Mahtab

The Supreme Court has appealed for “a collective, committed and courageous turnaround” to throttle the “insatiable vice” of corruption that has led to escalation of the divide between the haves and the have-nots. While writing a separate order restoring All India Anna Dravida Munnetra Kazhagam (AIADMK) general secretary V.K. Sasikala’s conviction and four-year jail term, justice Amitava Roy highlighted the menace of corruption in public life and said it evolves from “moral debasement” of people.

The judge said, “Corruption is a vice of insatiable avarice for self-aggrandisement by the unscrupulous, taking unfair advantage of their power and authority, and those in public office also, in breach of the institutional norms, mostly backed by minatory loyalists. Both the corrupt and the corruptor are indictable and answerable to the society and the country as a whole”. The judge has underlined that corruption by people’s representatives is not only in breach of the oath of office but also in defiance of the undertaking to work for society. “It is infringement of the community’s confidence shown in them and a betrayal of the promise of allegiance to the Constitution.”

Just two weeks before this judgment was pronounced by the apex court, Union finance minister Arun Jaitley, while presenting the Union Budget, stated that the government intention to tackle opacity in collection of funds by political parties. He proposed to bring down anonymous or unnamed cash donations by individuals to political parties from the current Rs20,000 to Rs2,000. In doing so, the finance ministry accepted the recommendation of the Election Commission, which had proposed prohibiting “anonymous contributions above or equal to the amount of Rs2,000”.

While there is no constitutional or statutory prohibition on receipt of anonymous donations by political parties, yet under Section 29C of the Representation of the People Act, 1951, political parties have to declare all donations above Rs2,000. Once the necessary amendments are carried out in the relevant provisions of law, all political parties will have to mandatorily maintain names and address of donors who contribute amounts above Rs2,000.

The finance minister has also proposed an electoral bonds scheme, under which donations would be allowed to be made to political parties by purchasing electoral bonds from authorized banks. He has said that the government would frame a scheme and an amendment would be carried out to the Reserve Bank of India (RBI) Act.

There were several reactions to the announcement, ranging from gushing praise to lukewarm approval. Everyone thought the minister had at last put the issue of political funding on the table and that would bring transparency and accountability.Jaitley has primarily announced four steps—one, a ceiling of Rs2,000 on the amount of cash donation that a political party can receive from one person; two, political parties are entitled to receive donations by cheque or digital mode from their donors; three, a new scheme of electoral bonds; and four, every political party will have to file income tax returns within the prescribed time limit in order to enjoy tax exemption. He has said this would bring in “greater transparency and accountability in political funding while preventing future generation of black money.” Actually, the second and fourth components are no different from what the existing law provides for.

The proposal for limiting cash donations to Rs2,000 has been widely misunderstood. Remember, the operative word is cash and the unspoken operative phrase is anonymous. Thus, instead of showing a donation of Rs20,000 from just one source, the political party can conveniently say that it was a donation from 10 unknown sources.

Today, when every small trader is expected to keep record of the source of every rupee earned by him, why do we have different rules for political parties? What is the logic behind this limit of Rs2,000? When data says, over 70% of funds received by seven national and 50 regional parties, as per filings with the Election Commission between 2004-05 and 2014-15, came from unknown sources, then why not have a system where every donated rupee is disclosed?

It has also been proposed to bring in an amendment to the RBI Act which will enable issuance of bonds. Donors can then purchase such bonds from designated banks, and these bonds can be given to the desired political party. Since the books of the donors will not mention the name of the party and the books of the party will not mention the name of the donor, secrecy can be maintained about the donors. This idea is good but impracticable.

Remember that each electoral bond, not elector, will require a serial number which will have to be entered into bank registers along with the names of the donors. If such a register does not exist, unscrupulous political parties could print bogus electoral bonds akin to the fake stamp paper racket promoted by Abdul Karim Telgi. It could be similar to the fake security bonds that were pledged by Harshad Mehta.

The fact of the matter is, there was and is no limit to how much cash a party can receive from all sources put together. Following the Law Commission’s recommendations, the Election Commission had proposed that no party should be allowed to receive more than Rs20 crore or 20% of its overall donations from anonymous sources. The finance minister has not paid heed to this advice. If one wants to bring in transparency in political funding, one should bring all donors into the open. There should not be any anonymity in political donations.

Today, our politics has become so divisive and toxic that everything becomes “suspect”. There is no business house that does not seek a favour from the government of the day. This uncertainty induces moral timidity and financial chicanery. The unvarnished fact is that no corporate house can sanguinely acknowledge working cheques for a political party’s treasurer. No businessman can afford to earn the wrath of the ruling party. Even the most honest of traders or entrepreneurs remains vulnerable to the state’s minatory inspector.

Transparency in public life is a much-desired goal. New norms of a level playing field will need to be institutionalized. If we aspire for a stable, just and ideal social order as envisaged by our forefathers and fondly cherished by numerous right-thinking citizens of this country, every citizen has to be a partner in the process.

Bhartruhari Mahtab is a member of Parliament and leader of the Biju Janta Dal parliamentary party in Lok Sabha.

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