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3 March 2017 Question Bank


3rd MARCH 2017 


(1 Questions)

Answer questions in NOT MORE than 200 words each. Content of the answer is more important than its length.

Links are provided for reference. You can also use the Internet fruitfully to further enhance and strengthen your answers.


1.   Critically comment on issues involved in funding of political parties in India and their implications on governance. (200 Words)


  • Right to form political parties is enshrined as a fundamental right [art 19] in Indian Constitution. Funding of parties is regulated under the Representation of people′s act, FCRA, Companies act etc.
  • The nature of Political funding in a country has a direct impact in deciding the quality of leaders that debate in the Parliament & assemblies, frame laws, and formulate policies to govern and administer the country.
  • Issues involved in funding of Political Parties :

Unknown Resources 

  • Around 70% of Political fundings in 2005-15 is unaccounted for because contributions below 20,000 do not have to be named. Hence majority of contributions remain from anonymous donors.

Black Money :

  • Political funding especially during elections are major sources of Black Money

Tax Exemptions :

  • on income have led to proliferation of Inactive Political parties (total parties in India ~ 2000) viz are used to park unaccounted income to avoid tax returns

Huge Expenditure :

  • is required for contesting elections so the ordinary citizens is unable to fight elections as he cannot afford it, implying a loss in public-participation in the democratic process

Foreign Funding:

  • Even though foreign funding is illegal under the FCRA, parties are engaged in receiving unaccounted foreign money .

Unequal level playing field:

  • When major political parties have generous donors from unknown sources and small level players do not have such avenues they are unable to compete on equal basis questioning a fair electoral process. Eg: loksatta of Andhra vs TDP.
  • The above issues called for removal of Exemptions on Pol Parties but Supreme Court justified the exemption stating that Pol parties needed money to carry out general activities like meetings, rally′s, elections and for their public role in Democratic setup, they must be able to maximum use of their funds

Implications on Governance :
 Legislature :

  • Direct impact on law-making procedures of country as who funds Political  parties can decide the actual law-makers.

 Crony Capitalism :

  • arising from the funding by corporate houses to political parties resulting in favoritism in the distribution of legal permits, government grants, special tax breaks, or other forms of state interventionism.

Lack of accountability:

  • CIC had issued order to bring political partparties under RTI but till date no party has shown compliance to it. Hence it is breach of public trust.

Corruption :

  • Politicians with corrupt mindset who used these unethical route to get to higher positions in the government will certainly promote corruption within his ministry/ department.

Trust deficit in democratic polity.

  • In this regard, a nuanced approach must be taken to introduce Electoral reforms as a way forward, by bringing Political parties under ambit of RTI, reducing disclosure limits from 20,000 to 2,00 per contribution, Public Funding of elections, Independent regulatory body to scrutinise political party finances and place them in public domain, and lastly give more power to Election Commission.
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