Donations of over ₹2,000 to parties cannot be anonymous: Election Commission

• Image Credit: National Herald

• Sep 20, 2022 | Kabir Chakraborty

Political parties are required to provide the poll watchdog with information about cash contributions of 20,000 or more, indicating the source of the payment. color:black;mso-themecolor:text1">

color:black;mso-themecolor:text1">Digital Desk: The Election Commission of
India has proposed a Draft Amendment, lowering the current cap of 20,000, which
states that cash contributions to political parties over 2,000 rupees cannot be
made anonymously. According to those with knowledge of the situation, it has
also attempted to cap monetary contributions at $20 crore or 20% (whichever is
lower) of the total donations collected by a party.

mso-themecolor:text1">Rajiv Kumar, the Chief Election Commissioner, suggested
changing the Representation of the People (RP) Act in a letter to law minister
Kiren Rijiju in order to "clear the political funding landscape."

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color:black;mso-themecolor:text1">Action against unrecognized parties was the
initial move. On condition of anonymity, a person with knowledge of the
situation stated that the Commission is currently trying to overhaul the way
recognized parties operate and crack down on black money and tax evasion.

color:black;mso-themecolor:text1">Political parties are required to provide the
poll watchdog with information about cash contributions of 20,000 or more,
indicating the source of the payment.

color:black;mso-themecolor:text1">The election board has also advised that each
contender open a different bank account just for the election. "Two
separate accounts must be formed for each election if a candidate wishes to run
first as an MLA and afterwards as an MP. Basically, the candidate needs to
register a separate bank account for each poll they are contesting. In this
manner, the Commission may monitor the candidates' spending caps and increase
system openness," the source claimed.

color:black;mso-themecolor:text1">The Commission discovered that although
several parties claimed they received no donations, their audited accounting
statement revealed they had received sizable sums, demonstrating extensive cash
transactions below the threshold limit of 20,000.

mso-themecolor:text1">The Commission has requested that digital transactions or
account payee cheque transfers be made mandatory for all expenses above 2,000
to a single entity or person in order to increase transparency into the
expenditure of individual candidates running for office and to eliminate
"fungibility" in this expenditure.

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mso-themecolor:text1">The amendment will have to be made in Rule 89 of the
Conduct of Election Rules, 1961.

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mso-themecolor:text1">To ensure that no foreign donations violate the RP Act
and the Foreign Contribution Regulation Act of 2010, the Commission has also
sought "electoral changes" to prevent this from happening. The
current contribution report style is "not equipped" to seek out more
information, and there is currently no means to expressly separate first
international donations.

color:black;mso-themecolor:text1">The decision was made shortly after the EC
continued its crackdown on these organizations for failing to comply with the
requirements of the RP Act by delisting 284 nonexistent but registered
unrecognized political parties (RUPPs) and declaring 253 others inactive,
according to the polling organization. With the most recent order, there are
now 537 political parties that the poll panel has warned for violating
electoral laws.

mso-themecolor:text1">As part of a tax evasion investigation into RUPPs, the
income tax authorities conducted searches at more than 50 locations across
different states on September 7. On September 11, the IT department said that
donations to Gujarat's RUPPs totaled more than 4,000 crore in the previous
three fiscal years.

color:black;mso-themecolor:text1">The Commission reported in May that 199 RUPPs
utilized income tax exemptions totaling 445 crore in 2018–19 and 219 RUPPs
totaling 609 crore in 2019–20.

mso-themecolor:text1">"In what ways will the Commission oversee cash? Only
if it is declared can it be monitored, according to Jagdeep Chhokar of the
nonprofit Association Democratic Reforms. "This law cannot be put into
effect. The Commission's underlying assumption is that individuals will openly
disclose how much money they donated to politics or how much money political
parties got.

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mso-themecolor:text1">“In any case, the money declared by political parties is
the tip of the iceberg,” Chhokar said. “A lot more the money is spent on the
polls.”