REWIND
New Delhi, March 23,1985
COMPANY DONATIONS NOT ENOUGH
By Inder Jit
(Released on 26 March 1985)
All, analysts and critics, are agreed on one
point: Mr. Rajiv Gandhi deserves a big hand for his decision to hark back to
the Nehru times and again permit companies to donate funds to political
parties. This single act on the part of the Government, as announced by Mr.
V.P. Singh in this Union budget, should help in two ways. First, make our
elections a little less unfair. Second, eliminate one major stimulus or excuse
for evading tax and generating black money. Company donations enabled all the
political parties during Nehru’s rule to get funds across the table --- some
more, some less. Expectedly, industrial houses and shrewd businessmen took out
what may be described as political insurance covers with all the parties. But
New Delhi under Indira Gandhi began to have second thoughts when Big Business
started backing the Swatantra Party, which stood for free enterprise, in a big
way. Unexpected support for a fresh look at company donations came from the
socialists, who were no less annoyed by the pro-Swantra attitude of big money.
In fact, Mr. Madhu Limaye, if my memory
serves me right, even came forward with an unofficial bill in the Lok Sabha to
demand a ban on company donations--- a demand which received a favourable
response from Mrs. Gandhi’s Government. He and other critics argued as follows:
“The profits of any company belong to the shareholders --- the public. Company
donations came out of these profits. A part of these profits would normally
come into the Government’s coffers if company donations were disallowed and
taxed. Thus, a part of the contributions from the companies in effect comes
from the Government exchequer and the people at large. Why then should those
who head various companies be allowed to distribute patronage and exploit this
privilege to personal advantage? Let them do so personally out of their own
pockets.” The argument had its points. Logically, it should have taken India
towards direct and full Government funding of elections. Instead, it gave Mrs.
Gandhi’s Government just the excuse it needed to ban company donations and
block the flow of funds to the Opposition.
Under the new dispensation, the ruling party
alone got funds --- of course under the table. But the decision played havoc
with the system as also with business ethics and morality. In one fell stroke,
it opened the flood gates of corruption. Funds were still required for fighting
elections. Since these could not be got lawfully, thoughts turned to other
ways. The late Lalit Narain Mishra and a few others showed Mrs. Gandhi the way
and became her fund raisers. India then entered the era of political quid pro
quo and kickbacks. Licenses, permits and what have you were unabashedly hawked
--- like chaat and peanuts on the
pavements. Leading industrial houses known for impeccable business morality refused
to join the new cult. However, before long they were left with no choice. A top
industrialist then told me: “It is a question of survival.” Individual
Ministers and their men also made big money in the process. Worse, however, the
electoral system itself got heavily debased and corrupted. All ceilings on poll
expenses were rendered meaningless. The sky became the limit.
The Government’s decision to lift the ban on
company donations will undoubtedly help the system. But it would be folly to
think that it would eliminate the scourge of black money or the requirement of
the political parties for unaccounted funds. Once having tasted blood, the
political parties are not going to easily give up the privilege unless several
reforms are undertaken. Today, the ceiling on poll expenses has become
meaningless. Candidates are, no doubt, required to file returns of election
expenses. But the Commission has no power to see whether the returns are
accurate. It is only empowered to see that the returns were filed in time and
were in the prescribed manner. What is more, the ceiling per candidate does not
include the expenses incurred by a political party following an amendment of
the Representation of the People Act in 1975 --- under Indira Gandhi. In 1980,
the Election Commission recommended that the Act be re-amended to restore the
earlier position. But nothing was done. This alone has made nonsense of any
ceiling on expenses.
Costs of elections have continued to
increase. Yet, little has been done to determine the sources that should be
legally tapped for campaign expenses. Unless this is done, there is little hope
of minimizing the evil influence of unaccounted money power and vested
interests. Company donations will at best be a few drops in the electoral
bucket. At the same time, we have to see that deserving candidates are
encouraged to stand for election even though they do not possess the minimum
money to conduct their campaign. However, this will not help so long as we are
unable to get the political parties to function on democratic lines through a
law, as in West Germany. The answer lies in one direction, as recommended by
the former Chief Election Commissioner, Mr. S.L. Shakdher, in 1980. The State,
according to him, should be made responsible for financing the candidates’
election expenses. In fact, he believes that it is not difficult to lay down
norms for identifying the areas and the quantum of financial assistance on the
basis of the poll performance at an election.
Not only that. Mr. Shakdher went one step
further and in the Election Commission’s report on the General Elections to the
Lok Sabha (1980) and Legislative Assemblies (1979-80) specifically recommended
State funding of elections. The report said: “The Commission is of the view
that there should be an election fund from which amounts could be drawn as and
when required under orders of the Election Commission for the following
purposes: (1) Revision of electoral rolls; (2) conduct of elections; (3)
storage of election materials and records; (4) payment of subvention to
political parties; and (5) issue of photographed identity cards.” The Commission
also went into the size of the fund and proposed that “the fund should
initially be of the order of Rs.100 crores for a period of five years. The
share of the Central Government on the on hand and various State Governments
and Union Territory Administrations on the other may be on 50:50 basis. The
Central Government and State Governments each may contribute Rs. 10 crores
every year so that over a period of five years the proposed fund of Rs.100
crores may be made up.”
A fund of Rs.100 crores may appear to be
small in the context of astronomical figures purportedly spent by the
Congress-I and other parties on the recent elections to the Lok Sabha and the
State Assemblies. But Mr. Shakdher maintains that the amount is adequate even
today to take care not only of Government expenses but also the expenses
incurred by the candidates and political parties. Assistance could be provided
in the following forms: supply of paper and electoral rolls, printing of a
limited number of posters, supply of petrol and diesel coupons for a restricted
number of vehicles, provision of posters and payments to polling agents and
other personnel. It should not be difficult for the Centre to manage by itself
an amount twice as large, namely Rs.200 crores over a five year period. A
contribution of Rs.40 crores every year out of an annual Union Budget of some
Rs.50,000 crores is insignificant indeed. We should surely not grudge this amount
for sustaining and strengthening our young democracy ---- and in enabling our
MPs to enter Parliament with a clear conscience. Government funding of
elections, as in West Germany, is bound to come some day. The earlier this
happens, the better for India and its democratic health --- and prosperity. ---INFA
(Copyright, India
News & Feature Alliance)
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