The Government of India (GOI) and especially our Prime Minister is appealing for public support in moving India towards a "digitized and cashless economy". Not just citizens, the politicians need to do much more too.

 1.      In furtherance of the Government of India's appeal and in fact to significantly strengthen it, this petition seeks to require the Government of India to specify all donations to Political Parties, every rupee of it, should only be by "digitized and cashless" means – i.e. through and from a plastic money/ card/ internet account linked to a bank account or a card topped up from a bank account, where the payers details are captured.

 -        Section 29B of the Representation of People’s Act 1951, states "every political party may accept any amount of contribution voluntarily offered to it by any person or company" other than any juridical person or company financed by the government.

With the limit brought down from Rs 20,000 to Rs. 2000 for which donor's details are not required - there will be no change. Only the political party's accountant must work longer to give the same effect using Rs. 2000/- donors.

2. The Finance Act 2016 now permits donation to political parties by foreign companies when majority of shares are held by an Indian citizen. This was done to subvert violation of legal provisions that prevented donations by "foreign" companies. The companies Act 2013 clearly defines what is a foreign company - and the same definition should have been kept.

 3.  The Income tax requires a small businessman with barely Rs. 1.5 lakh annual turnover to maintain books of account with a record of all receipts/ payments or accept a fixed percentage as a tax on gross turnover. Why should not the political party maintain full details? If e-donation is mandated, given the government's insistence on Aadhar linkage, the details will be automatically captured for every rupee received by a political party.

(According to Association for Democratic Reforms, “unknown sources” are the top sources of income for most political parties. In 2014-2015, the BJP earned nearly 90% i.e. Rs 872.02 crore from “voluntary contributions” and Indian National Congress collected nearly 55% i.e. Rs 323.15 crore, by “issuing coupons” or through “sale of publications”[3])

 4. We demand that anyone unable to donate to a political party by e-payment method should be summarily prevented from donating altogether to a political party.  Further, as there is no guarantee that money received in cash is actually duly transferred to the concerned political party or a portion pocketed, hence e-donation is desirable.

 5. Further, all expenses by political parties should be by cheque, plastic money, internet payment (digital payment) – whether payment is for a polyethylene bunting or for meals to the cadre campaigning for the party candidate or for fuel or vehicle hiring.

 6. There can be no donation in kind or via sponsorship  – like trips to election sites on a private helicopter of a business house or availing trips on Air Force crafts when the objective of the traveller (even if a Prime Minister or Minister) is to campaign for his party and not further any state objective.

7. The demonetization order of the Government of India and the plethora of amendments in various Act made to support its agenda in Aadhar linkage,  has demonstrated that even decisions of far-reaching consequences can be pushed through at will. Thus a plea of debate cannot be the excuse to hold up real action. There is no difficulty to institute such a change for all parties. It is most feasible for parties that back the present dispensation.

8. By working in tandem to keep political parties out of Right to Information Act, despite High Court order, even the Bharatiya Janta Party has shown where it stands on transparency.

9. A significant part of other donations received by Political Parties are made through Electoral Trusts which are registered under Sec 8 of Companies Act 2013 and are affiliated to large business entities[5]. Apparently, Tata Group was the first to take this route to mask its donations to political parties. Some examples of association guessed from the profile of Trustees/ Directors as per ADR are:

Name of the Electoral Trust - Company/ conglomerate which set up the Trust*[6]

(i)        Janhit Electoral Trust - Vedanta Group

(ii)      Satya Electoral Trust - Bharti Group

(iii)    People’s Electoral Trust - Reliance Group

(iv)    Mahindra Electoral Trust Company - Mahindra Group

(v)      Progressive Electoral Trust - Tata Group

(vi)    Paribartan Electoral Trust - MP Birla Group

(vii)  Bajaj Electoral Trust - Bajaj Group

(viii)Triumph Electoral Trust - Murugappa Group

(ix)    Kalyan Electoral Trust - Bharat Group

(x)      Janta Nirvachak Electoral Trust - Kotak Group

(xi)    Jagrut Electoral Trust - Lodha Group

(xii)  New Democratic Electoral Trust - Mahindra Group

(xiii)Samaj Electoral Trust Association - KK Birla Group

(xiv)Gauri Welfare Association Electoral Trust - Jain Group

 

Under Rule 17CA of Income Tax Rules, 1962 approved by the Central Bureau of Direct Taxes (CBDT) Electoral Trusts are required to donate 95 percent of their total income in a financial year to registered political parties.

Such Trusts are required to file a report on donations to the Election Commission of India (ECI). Most have not complied.

Permitting Electoral Trusts to register under Sec 8 (erstwhile sec 25) of Companies Act. But political agenda is not set out in the charitable objects permitted in companies Act "promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of the environment or any such other object". Electoral Trust is only a body whose sole purpose is only to mask others donation to a political party cannot be said to fall under promotion objectives set out under this section of the Companies Act. Political parties are allowed to claim exemption from Income Tax and yet standard rules applicable on NGOs are not made applicable. The same government de-registered thousands of NGOs for non-compliance of the statutory provisions. But since BJP was affected, it chose to back date and change the law itself to protect itself.

10. It was needed that political parties should be required to reflect the name of the key Trustees of the Electoral Trust in their donation list. Yet (petition as updated on 31-3-2017) political party like BJP only used its majority to add a further layer of opacity. It introduced Electoral Bonds [9] - where the donor and the receiver is not evident. So while the transaction is through the banking mode, the Electorate remains ignorant of which business man is holding the puppet's strings of the politicians.

When corporates were already lawfully allowed to donate to political parties under Sec 80GGB of Income Tax Act and key shareholders under Sec. 80GGC there was no need for creation of Electoral Trusts or Corporate Bonds. That they exist and are in fact encouraged, demonstrates Government's keenness to cover the track of the donations to political parties. This violates transparency.

11.  In the matter of denying applicability of the Right to Information Act on it, the BJP's National Democratic Alliance has told the Supreme Court when verifying its appeal, that bringing political parties under the Right to Information Act will “impact internal working and political functioning”. With e-donation from aadhar linked bank accounts, providing information at least after an election is over or some such cut off will be eminently feasible and is demanded.

We demand the following changes -

a) no electoral trust donation to political parties

b) no electoral bonds route

c) only e-donation to a political party that too only  from Aadhar linked bank account

d) no donation in kind (no air trips on private/ company jet or vehicles), for campaigns or political parties 

e) denying State's resources when Prime Minister/ Minister is involved in campaigning, no colourable merging of "official' trip with campaign and politics

Above will promote transparency in political parties and further probity in public life. The best demonstration of doing all that is necessary to stamp out corruption from India is giving proof of taking all valid and real steps capable of reducing corruption. The above demands are steps that are within the immediate control of the political top brass who run India. Instituting the above changes in letter and spirit will underline their commitment to corruption free India. 

In keeping with the highest standards of public life, it is expected this petition will meet with the wholehearted approval of our Prime Minister as it only extends his ideas of corruption free India to the political sphere of which too he is a vocal representative.

In the hope of early and concrete action,

 

 

[1] This pertains to a complaint to Delhi High Court on donations by Vedanta (registered in England and Wales) and its subsidiaries registered in India Sterlite Industries and Sesa Goa which the government chose to designate as "Indian" to protect donation received by BJP
[2] First slide on http://www.indianrail.gov.in/
[3] http://adrindia.org/content/what-war-black-money-bjp-congress-unite-hide-fund-sources
[4] http://timesofindia.indiatimes.com/india/Passport-alone-no-proof-of-citizenship-Bombay-HC/articleshow/22244467.cms
[5] http://pib.nic.in/newsite/PrintRelease.aspx?relid=93764
[6] http://www.adrindia.org/content/analysis-contribution-report-electoral-trusts-fy-2013-14 and the registered addresses of the Electoral Trust is available at in  http://www.mca.gov.in/DataPortal/Ministry/DataPortal/Section25_Companies.pdf
[7] http://www.hindustantimes.com/business/demystifying-india-s-poverty-line-here-s-everything-you-need-to-know/story-43vy1sQ7LrCZuezTakDnkM.html
[8] http://www.livemint.com/Money/VL5yuBxydKzZHMetfC97HL/Richest-1-own-53-of-Indias-wealth.html

[9]http://www.livemint.com/Opinion/oQ46wof1yiN2tjGpapuSVN/A-body-blow-for-political-transparency.html