NEW DELHI: The Election Commission of India is reported to have sent a proposal to the Union law ministry seeking to cap cash donations to political parties at 20 per cent of the total annual receipts with a maximum of Rs 20 crore, and bringing down anonymous political donations from Rs 20,000 to Rs 2,000.
The proposal sent by Chief Election Commissioner Rajiv Kumar to Union Law Minister Kiren Rijiju suggests a slew of amendments in the Representation of the People Act to check the flow of black money into the election process.
As per the existing Section 29C of the Representation of the People Act, 1951, political parties are required to give the EC details of donors contributing in excess of Rs 20,000. If the government accepts the proposal, parties will have to provide the EC names and other details of all donors contributing in excess of Rs 2,000.
However, bringing down anonymous donations from Rs 20,000 to Rs 2,000 will not in any way check the flow of cash into political parties. It will at best add to the parties’ clerical work as they will have to issue more ‘coupons’ showing donations under Rs 2,000. Political parties have developed a coupon system for collecting funds to evade the EC radar.
They issue coupons to internally account for the cash donations they receive. Hence, the reduction of the limit on anonymous contributions will not hamper their cash collection. However, the proposal that has sent alarm bells ringing for the opposition parties is the capping of cash donations at Rs 20 crore.
Political parties have been showing cash receipts of hundreds of crores annually by issuing coupons. If the EC recommendations are accepted, their annual cash receipt will be capped at Rs 20 crore. BSP MP Kunwar Danish Ali said the cap on cash donations would tilt the playing field in favour of large parties. “Our party the BSP runs on small donations from individuals.
Large companies do not fund us. Capping cash contribution at Rs 20 crore is clearly aimed at choking the flow of funds to the opposition, especially smaller parties like ours that run on crowd-funding. We will oppose this move.” He said companies and high net worth individuals are afraid of giving money to opposition parties as they fear government backlash.
“Now, the government wants to stop small donors from funding us,” he said. Parties such as the BSP have been receiving over 75 per cent of their contribution in cash, which runs into hundreds of crores. Transparency activists have for long been demanding full accountability for all monetary contributions to parties, including via electoral bonds, to clean up the poll process.