Transparency in the System of Political Funding In India

Political funding is the funds/expenses which every national and state political parties uses to run the party (for election campaigning and for day to day activities) these funds are received as donations given to the parties by the private members like by individuals, partnership firm, companies, party members etc.

Even after the 70 years of independence, the country has not been able to develop a transparent method of funding political parties which is essential to the system of free and fair elections provided under Indian Constitution. Elections are carnival of democracy in which different parties took part to form a government and shall not become the grounds of corruption which will harming the Democracy and principles of democracy itself. Corruption is the major setback and impediment to health of democracy.

Various countries with democracratic form of Government are dealing this problem in their own way like restricting the expenditures, state funding, encouraging small funding, making tax exempted political donation, increasing corporate donation fund, setting up electoral trust etc.

In India, 2017 union budget, proposed by the Finance Minister Arun Jaitely seems to have taken some initiative to make political funding more transparent in future. Firstly, Finance Minister Arun Jaitely had proposed a four-point plan of action to “clean the system of funding of political parties” and elaborated that “in accordance with the suggestion made by the Election Commission of India, the maximum amount of cash donation that a political party can receive will be Rs 2000 from one person against the earlier limit of 20,000.”. Secondly, it asked donors to use cheque or electronic modes to make payments to political parties.

Though an improvement made by the government like the donation rule or receiving money by electronic means still have a big loophole that can be exploited by wrongdoers. A political party can still misuse this rule to facilitate inflow of unaccounted money.  Cheques and electoral bonds are transparent means, but letting the company cover up the name of the beneficiary party while making payments through cheque or bonds make no sense and the government can claim no major progress as far as transparency in political funding is concerned.

Therefore, to deal with the problem of political funding, it should bring actual transparency where everyone in the country knows who is funding whom, and do not settle for any vagueness.

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