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ASSOCHAM wants transparent election funding

Posted on Feb 18, 10:03PM | IBNS

New Delhi, Feb 18 : In a major policy statement leading industry chamber ASSOCHAM has come out with a study that recommends removal of ceiling on election expenditures of candidates, transparent funding of election expenditure, creation of a Government fund of Rs 5,000 crores over five years for part funding of candidates spending and campaign funds to be open to public view during the election as the use of black money in the election process threaten the credibility of the system. The chamber has claimed that existing legal structure for regulating election expenditure and income provided "a fertile environment for generation of black money".

The suggestion for total transparency in election receipts and expenditures and part funding by Government would be a "game changer", it said.

It has also suggested measures to ensure that spending by recipient political parties was equitable over constituencies so as to further democratize conduct of elections and attract more capable but less affluent persons to contest.

The study on 'Funding of Parliamentary/Assembly Elections' was jointly released by Chairman of Direct Tax Council and Legal Council Ved Jain and R K Handoo respectively along with Secretary General ASSOCHAM D S Rawat here recently.

The chamber said these measures would also be a "great incentive to cleansing public life in the country and for better governance".

It claimed that business would welcome such a move as it would relieve it of pressure to fund elections with unaccounted funds.

Transparent funding including revealing source of all donations into a separate election account for all candidates and parties open to public view would also remove public perception that through illegal donations business and political class are promoting a quid pro quo, it said.

"The election account created by each candidate would be closely audited by EC appointed auditors. No personal expenditure would be allowed out of it. The account would be in the public domain and updated week by week," said Jain while releasing the paper.

"Any balance in the account after the election would revert to the Government created public election fund. In the case of political parties the same transparent procedure would apply and any balance in the fund would have to be set apart for the account for the next election. State Governments should also create such public fund for supporting candidates for state elections," he said.

The ASSOCHAM paper further says that "given the right legal setting, business would like to support political funding in a transparent and equitable manner so that it is not seen as favouring any party to the exclusion of others" for gaining benefits.

The chamber's study is significant for exposing the "illusion" of candidates remaining within the ceiling prescribed by the Election Commission and political parties trying to pass on most of their funds as having received from small donations below Rs 20,000 each.

Quoting from various studies and its own research ASSOCHAM has revealed that expenditure per candidate for each Lok Sabha constituency often was double the ceiling of Rs 40 lakhs and that wealthier candidates proportion of success in the poll was far higher than that of the less wealthy ones.

The study has marshaled a lot of data regarding actual expenditure by the candidates to show how they hide the reality of large expenditures above the ceiling prescribed the election law, said Handoo.

The study also reveals that one political party that received large donations from just 28 donors however has an annual receipt of Rs 497 crores which was claimed to be mostly from donations below of Rs 20,000 each.

Yet another disclosed revenue of Rs 172.61 crores but did not have a single donor above Rs 20,000. Even where parties disclose high paying donors to EC, these names are not open to public view.

Puncturing claims that small donations from undisclosed donors could come up to this level, ASSOCHAM study pointed out that cost of such collection would be too high for the claimed benefit.

The chamber has also disclosed that election expenditure actually spent by "some at least" of the political parties is "astronomical in the Indian context".

It also admits that, given the nature of Indian geography and demography conducting campaign "ipso facto would be an expensive business".

The study seeks to place its demand for lifting ceilings and call for total transparency on the collection and spending within that context.

The study also reveals certain compulsions of political leaders to spent large amounts during the campaign.

For many political workers election is a means of earning some money and they expect their leaders to open their purse strings on such occasions," it says.

"The political class involved does not see such large spending as unethical," points out the study.

Therefore, ASSOCHAM is of the considered view that it is in the interest of probity in public life that a good part of the expense is borne by the public funding.

"Earlier also there had been recommendations for significant public funding of elections. The Indrajit Gupta committee for instance in 1990s had recommended public funding by Central and State governments setting apart together Rs 660 annually to such a fund but the proposal could not go far because state governments were not willing," the chamber said.

"We believe now that there is great concern over illegal sources funding part of election expenditure, the time has come for reviving this proposal and create a public fund of Rs 1000 annually (in a five year term of Lok Sabha it would add up to Rs 5000).

"Each state could also create similar public fund for distributing among its political parties for state's Assembly elections going down to local body elections," said Rawat.