Mumbai: Nothing could be more ironic than Prime Minister Modi’s 1st July address to the Chartered Accountant’s body in Delhi on their Founders Day, where on one hand he exhorts them to be transparent and corruption free and place country above clients, while on the other hand his own govt. has placed party over country, at least on the issue of political funding.
The recent amendments proposed in the Finance Bill 2017, to a host of Acts viz. the Representation of People’s Act, the Companies Act, the Income Tax Act and the RBI Act have been skillfully drafted leading people to believe that the Govt. deserves a pat on the back when in fact the Govt. has back stabbed them. The execution of the amendments has been brilliant too. At the eleventh hour the Govt. clubbed the proposed amendments as non-monetary clauses in Finance Bill 2017 and got it passed, so that there would be no debate on it in the Rajya Sabha, where it is short of numbers.
The main issue here is the ‘Electoral Bond’ which was introduced by the Finance Minister Arun Jaitely in the Budget. Electoral Bonds can be purchased from banks by individuals and corporates and such can be transferred to the political party through banking channels.
Earlier political parties had to record and disclose donations in excess of Rs 20000 in cash or cheque or digital means to enjoy tax exemption under the Income Tax Act. The new amendment in the Income Tax Act however seeks to exempt the new Electoral Bonds from such disclosure. Running parallel to this amendment are also the amendments in the Companies Act which does not make it mandatory anymore for companies to disclose the identity of the political party and the amount of funds transferred through the means of Electoral Bonds in its profit and loss account. To make matters even more grave the Govt. has also removed the cap of 7.5% of the average profit as the maximum that can be transferred to political parties. Thus very large donations can be made to political parties with absolute anonymity. Thus the claim of transparency that the movement of funds being through the banking channel in case of such bonds is just an eyewash in the face of its anonymity. And to top it all donations to political parties are also not under the purview of The Right to Information Act.
The lowering of threshold of donations made in cash from Rs 20000 to Rs 2000 to political parties now looks like a strategy of the Govt. to divert attention or to avoid the glare on the larger issue of political funding through ‘Electoral Bond’. What people fail to realize is that cash alone is not ‘dirty’ and payments through the banking system alone is not ‘clean’ to comprehend the devious Electoral Bond.
And thus the headlines of newpapers screaming of a crack-down of black cash in the electoral system post demonetization and the Finance Bill ‘ 2017 seems today to be only a farce.