Daily Current Affairs : 2-December-2023
The recent conclusion of Supreme Court hearings on the challenge to electoral bonds in India demands a careful examination of their potential impact on democracy and the rule of law. In this essay, we explore the dimensions of political funding, the importance of disclosure, and propose necessary reforms.
Political Funding in India:
Statutory Provisions:
- Representation of the People Act, 1951: Governs election rules, expenses, contributions, and account maintenance.
- Income Tax Act, 1961: Regulates tax treatment of political parties and donors.
- Companies Act, 2013: Regulates corporate donations, specifying limits and mandating disclosure.
Methods of Raising Political Funding:
- Section 29B of RPA: Allows individual donations with a 100% deduction.
- State Funding: Prohibits direct funding; permits regulated indirect funding.
- Corporate Funding: Governed by section 182 of the Companies Act, 2013.
- Electoral Bonds Scheme: Introduced in 2017, allows anonymous donations.
Importance of Disclosure in Political Funding:
Amendments to RPA 1951:
- Introduction of electoral bonds brings complete donor anonymity.
Contrast with International Practices:
- International norms emphasize full disclosure of political donations.
- The U.S. mandates transparency since 1910; the EU enacted regulations in 2014.
Global Convergence on Fundamental Requirements:
- Comprehensive disclosure and donation limits are fundamental worldwide.
- Aim: Ensure transparency, prevent corruption, and maintain public confidence.
Foundation of Representative Democracy:
- Political parties are crucial for representative democracy.
- Public disclosure of funding is imperative for citizens’ trust in parties and politicians.
Role in Safeguarding Democracy:
- Transparent financial accounts combat corruption and safeguard the rule of law.
- Accountability reinforces democratic principles of openness and fairness.
Preventing Undue Influence:
- Disclosure prevents undue influence by business interests and vote buying.
- Ensures an equitable playing field and upholds democratic ideals.
Reforms Needed in Political Funding:
Importance of Electoral Justice:
- Electoral justice is crucial for upholding democracy and electoral rights.
Challenges with Electoral Bonds:
- Threat to transparency and integrity of elections due to undisclosed donor details.
Comprehensive Approach for Reform:
- Donor Identification: Identify donors above a specified limit.
- Immediate Reporting: Mandate reporting of significant donations to the election commission.
- Publicizing Party Accounts: Ensure transparency through publicized political party accounts.
- Independent Auditing: Implement independent auditing for financial integrity.
- Establishing Limits: Set funding and expenditure limits to prevent disproportionate influence.
State Funding of Elections:
- Aims to reduce reliance on private donations, minimizing potential influence.
- Holistic Approach: Reforms should preserve democratic values, ensure fair elections, and minimize the impact of money on politics.
Important Points:
Political Funding in India:
- Representation of the People Act, 1951, Income Tax Act, 1961, and Companies Act, 2013 govern political funding.
- Methods include individual donations (Section 29B of RPA), state funding, corporate funding, and the Electoral Bonds Scheme.
Importance of Disclosure:
- Introduction of electoral bonds in 2017 brings complete donor anonymity.
- International norms emphasize full disclosure of political donations for transparency and preventing corruption.
Foundation of Representative Democracy:
- Political parties are crucial for representative democracy.
- Public disclosure of funding is imperative for citizens’ trust in parties and politicians.
Role in Safeguarding Democracy:
- Transparent financial accounts combat corruption and safeguard the rule of law.
- Accountability reinforces democratic principles of openness and fairness.
Preventing Undue Influence:
- Disclosure prevents undue influence by business interests and vote buying.
- Ensures an equitable playing field and upholds democratic ideals.
Reforms Needed:
- Donor Identification: Identify donors above a specified limit.
- Immediate Reporting: Mandate reporting of significant donations to the election commission.
- Publicizing Party Accounts: Ensure transparency through publicized political party accounts.
- Independent Auditing: Implement independent auditing for financial integrity.
- Establishing Limits: Set funding and expenditure limits to prevent disproportionate influence.
State Funding of Elections:
- Aims to reduce reliance on private donations, minimizing potential influence.
- Holistic Approach: Reforms should preserve democratic values, ensure fair elections, and minimize the impact of money on politics.
Why In News
In light of the current political circumstances and concerns regarding donations, the conclusion of the Supreme Court hearings on the challenge to electoral bonds prompts a critical examination of the potential impact this challenge’s resolution may have on democracy and the rule of law in India. Moreover, it underscores the pressing need for transparent and accountable electoral financing mechanisms to ensure the integrity of the democratic process.
MCQs about Reforming Political Funding in India
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What statutory provisions in India govern political funding, including rules on election expenses, contributions, and account maintenance?
A. Companies Act, 2013
B. Income Tax Act, 1961
C. Representation of the People Act, 1951
D. Section 29B of RPA
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Which method of raising political funding in India allows for anonymous donations to registered political parties?
A. State Funding
B. Corporate Funding
C. Section 29B of RPA
D. Electoral Bonds Scheme
-
What is a key international norm emphasized for political funding to ensure transparency and prevent corruption?
A. Anonymous Donations
B. Full Disclosure
C. Indirect Funding
D. Corporate Contributions
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Why is public disclosure of political funding considered imperative for representative democracy?
A. To maximize corporate contributions
B. To maintain an equitable playing field
C. To uphold citizens’ trust in parties and politicians
D. To promote anonymous donations
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