Electoral bonds violates transparency in funding of political parties: Election Commission

The Election Commission informed the Supreme Court that the introduction of electoral bonds as a means for political party funding will seriously dent transparency in funding, a fact which the poll panel indicated to the Centre way back in May 2017.

The statement by the EC came after an affidavit filed in response to a PIL filed by Association of Democratic Reforms (ADR) which has challenged the introduction of electoral bonds and various amendments introduced subsequently that bars the parties from disclosing details of these electoral bonds. A bench headed by Chief Justice Ranjan Gogoi is expected to hear the matter on April 2.

Joining the chorus against the electoral bonds, the EC affidavit filed on Wednesday specifically referred to Section 29C of the Representation of Peoples (RP) Act which excludes electoral bonds from the ambit of disclosure to EC.

The poll panel informed that on May 26, 2017, after spotting this amendment, it informed the Ministry of Law and Justice that such a provision was not acceptable as it defeats the goal of transparency that EC wants to achieve.

It said, "By insertion of provision to Section 29C of RP Act vide Section 137 of the Finance Act, 2017 it is evident that any donation received by a political party through an electoral bond has been taken out of the ambit of reporting under the Contribution Report as prescribed under Section 29C." In such a situation, EC added, "it cannot be ascertained whether the political party has taken any donation in violation of provisions under Section 29B of RP Act which prohibits political parties from taking donations from Government companies and foreign sources."

These bonds are in the denomination of Rs 1000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore.

The EC further pointed out to other amendments aimed to make corporate funding to political parties anonymous. It referred to Section 13A of the Income Tax that states income of political parties will not include income from voluntary contributions. A corresponding change is also made to Companies Act where Section 182 allows a free hand to companies, except Government companies and companies existing below three years, to make any amount of contribution to political parties.

The EC affidavit said that in its letter to Centre, it proposed amendments to plug loopholes by which parties were not maintaining accounts of donations below Rs 20000. But the fresh amendments, EC said, "will have serious repercussions on the transparency aspect of political funding of political parties."

International Influence In Policies

• Election Commission said that the changes in the FCRA 2010, will allow unchecked foreign funding of political parties which could lead to Indian policies being influenced by foreign companies 
• The poll panel said that it has also proposed certain electoral reforms over the years for the purpose of bringing about more transparency and fairness in the electoral process in the country