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17 February 2017 Question Bank


17th FEBRUARY 2017


(1 Question)


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.      Is state funding of elections a solution to end the black money-electoral politics nexus?


Points against state funding of election:

  • Conceptually, state funding of elections is based on the presumption that there would be then no private funding. The Election Commission simply does not have the wherewithal to ensure that.
  • Under the existing legal dispensation, election candidates are obligated only to reveal their spending and keep it theoretically within limits prescribed by the Election Commission, a ceiling routinely violated with impunity by every candidate in every election.
  • They are under no obligation to disclose how much money they have collected and where it has come from. This needs to change. All candidates must reveal the sources of their electoral funding statutorily.

Political Funding from unknown sources:

  • Insofar as political parties are concerned, the Supreme Court must take suo motu cognisance of the recent Association of Democratic Reforms report that documented that 69% of the income of political parties between 2004-05 and 2014-15 came from unknown sources.
  • This is happening because of a deliberately inserted exemption: Section 13 (A) subsection (b) of the Income Tax Act, 1961 that exempts political parties from even keeping a record of the source of donations below ?20,000.
  • It was a previous National Democratic Alliance government that in 2003 had raised the limit of anonymous donations from ?10,000 to ?20,000, and now the Finance Minister says in his Budget speech that it would be brought down to ?2,000.
  • This is nothing but a mere eyewash since the law mandates that no records of donations below this threshold need to be maintained.
  • It is easier to monitor the funding of political parties than seek state funding of elections
  • There are two aspects to the financing of the democratic process: the financing of elections from the panchayat level to Parliament, and the funding of political parties that is not election-specific.
  • To check corruption in elections, it is necessary to consider public funding of political parties — though certainly not of elections.
  • It is impossible to keep tabs on money spent in elections. The issue here is one of black money and not white money. We cannot monitor how black money is put to use in bribing voters, in paid news, and other forms of transgressions, though we have been able to have some measure of success.
  • Also, all private donations will be totally banned if we follow this system.
  • And the party accounts will be subject to audit by the Comptroller and Auditor General.
  • As for the question, why should the public pay for political parties, one easy answer is if you want honesty and transparency in governance, this is a small price to pay.
  • If that is not acceptable, we should create a national election fund to which corporates and others can be asked to donate. Business houses can make donations to the parties they are beholden to and the funds will be disbursed according to your performance.
  • We all love to lament dirty money in politics, but few of us bother to put a small bit of our legally earned money in politics. We have failed to develop healthy traditions of political funding.

A proposal for post-election funding of political parties

  • Political parties can be funded post-election based on their actual performance.
  • We could arrive at some calculations based on the performance. We could, for instance, agree that for every vote obtained, ?100 be given.
  • There could be a minimum qualifying cut-off of, say, 1% of valid votes polled, so as to deter non-serious candidates.
  • There could also be a ceiling on reimbursement, say, twice the maximum permissible expenditure for a candidate in a constituency, so that a candidate and her party do not get more than what they need.
  • In the last general election, 55 crore votes were cast. So, at the rate of ?100 per vote it comes to around ?5,500 crore. Is this adequate? I’d say yes. This roughly corresponds to the amount raised by all political parties together in five years. This money can be distributed among the parties based on their poll performance and must be paid by cheque. No extortion. No bribes. No quid pro quo.
  • A study, ‘Political Finance Regulations Around the World’, by the International Institute for Democracy and Electoral Assistance, Stockholm (2012), in 180 countries shows 71 nations have the facility of giving state funds based on votes obtained. This includes 86% countries in Europe, 71% Africa, 63% of the Americas and 58% of Asia. If it works well in so many countries, there is no reason why it cannot be implemented in India.
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