The election commission (EC) differs with the Centre’s view that introduction of electoral bonds will curb illegal money in political funding. Finance minister Arun Jaitley announced the proposal to introduce donations through electoral bonds in his budget speech on February 1.
The poll panel, which is set to share its misgivings about the bonds with the government, has objections to the amendment to the Finance Bill that bars disclosing details of donors and inclusion of contribution from bonds in income-tax returns.
The panel is not happy with the changes in the Representation of People’s Act which allow political parties not to show collections from the bonds in their contribution reports filed with the EC, sources said.
“If it is not part of the contribution report, it will not be part of the report the EC gives to the income-tax department, the corporate affairs ministry or the ministry of home affairs. It will not be made public anywhere, so how will there be transparency?” a source said.
Under section 29 (c) of the Act, political parties had to file contribution reports, complete with the names of donors and their addresses, for amounts above Rs 20,000 from a single person or company. The commission has also expressed concern over the non-implementation of lowering the cash donation component from Rs20,000 to Rs2,000 as was suggested by it.
“The announcement was made, but there is no formal announcement to the EC on this,” the source told HT. The commission has suggested limiting the tax exemption to contributions under Rs 20 crore or 20% of the total collection, whichever is lesser. Anything over Rs 20 crore will be taxed.
The poll panel is also circumspect about the amendment to section 13 (a) of the I-T Act that deals with the income of political parties and makes it mandatory for donations above Rs 2,000 to be made only through account-payee cheques or drafts or real-time gross settlement systems (RTGS, where money transfer takes place from one bank to another on a real-time basis).
“Again, payment through these modes will remain a secret between the donor and the bank. There is no way of knowing the details. Political parties are not even covered by the Right to Information Act,” the source explained.
But the poll panel feels the biggest blow to measures for ensuring transparency is the amendment to the Companies Act 2013 that removed the cap on corporate contributions to political parties. “The removal of the cap of 7.5% on the contribution means corporate houses will now be able to donate unlimited sums. Worse, this will not be shown in their books,” the source said.
Earlier, all companies were required to declare contributions to political entities in their profit and loss statements; they had to give details of the amount contributed and the name of the party.
The commission fears this amendment will increase the probability of shell companies coming up for channeling donations to political parties.