The Election Commission has proposed reducing anonymous political donations to ₹2,000 from ₹20,000 and cap cash donations at 20% or at a maximum of ₹20 crore to cleanse election funding of black money, sources said on Monday.
Chief Election Commissioner (CEC) Rajiv Kumar has written a letter to Union Law Minister Kiren Rijiju, recommending a slew of amendments in the Representation of the People (RP) Act, sources in the government said.
The proposals are aimed at ushering in reforms and transparency in donations received by political parties, and also the expenditure incurred by candidates trying their luck at the hustings, they said.
As per rules in force currently, political parties have to disclose all donations above ₹20,000 through their contribution report that is submitted to the EC. If the EC’s proposal is approved by the Law Ministry, all donations above ₹2,000 shall be reported, thereby enhancing transparency in funding, sources said.
The move comes in the backdrop of the poll panel recently delisting 284 defaulting and non-compliant registered unrecognised political parties (RUPPs), declaring more than 253 of them inactive. The Income-tax department recently raided a number of such entities across the country on charges of tax evasion after the EC shared its report with its administrative authority, the Central Board of Direct Taxation (CBDT).
The Commission found that while donations reported by some political parties were nil, their audited accounts statement showed receipt of huge amounts, proving large-scale transactions in cash, below the threshold limit of ₹20,000, the sources said
The EC has also sought to restrict cash donations at 20% or at maximum ₹20 crore out of the total funds received by a party, whichever is less.
Other recommendations
As part of bringing transparency in the expenditure made by individual candidates contesting polls and to remove “fungibility” in this expenditure, the EC has sought to make digital transactions or account payee cheque transfers mandatory for all expenses above ₹2,000 to a single entity/person.
Government sources said once this amendment -- to be made in Rule 89 of the Conduct of Election Rules, 1961 -- is carried out, a candidate would have to maintain a separate account for receipt and payments related to elections and the same has to be transparently disclosed to authorities, as an account of election expenditure.
As of now, maintaining a separate bank account for poll expenditure is part of instructions but EC wants it to become part of Conduct of Election Rules.
The EC also wants every candidate to open a separate bank account for election purposes, route all expenses and receipts through this account, and furnish these details in their account of election expenditure.
The EC has also sought “electoral reforms” to ensure that no foreign donations creep into the funds of the parties as stipulated under the RP Act and the Foreign Contribution Regulation Act (FCRA), 2010.
The sources said, at present, there is no mechanism to segregate foreign donations at the initial stages specifically, and the present format of contribution report is “not equipped” to seek additional information.
The Commission, therefore, has sought for a broad discussion on the subject between different stakeholder Ministries to come up with a mechanism to identify and deter prohibited foreign donations.
Another area of concern that has been identified by the EC is the violation of foreign exchange regulations, they said.
