A number of measures have been suggested to improvise and strengthen the existing electoral practices in India.
Political parties in India Since 1952, when the first election ended, various reforms have addressed the issue of party funding. However, the current situation is as follows: According to a study by the Centre for Media Studies, was projected to be spent in the 2014 general election by government, political parties, and candidates. Official spending by the Election Commission of India and the Government of India was around Rs. 7,000-8,000 crores —i.e. elections have become very expensive for political parties. The Association for Democratic Reforms (ADR) in a report published on 25 January 2017 states that the total declared income of national and regional parties between 2004-2005 and 2014-2015 stood at Rs. 11,367 crores. Total income from known donors was 16% (Rs. 1,835 crore) and total income from other known sources including membership fees, bank interest, etc. was 15% (Rs. 1,698 crore) leaving 69% (Rs. 7,833 crore) of the total income from unknown sources (contributions below Rs. 20,000 each), and thus untraceable. Comparing audited income with projected spending seems to indicate that political parties earned an additional large amount of black money. In a 9 May 2014 on the Lok Sabha Elections of 2014, ADR shows that out of the total 8,163 contesting candidates, 1,398 (17%) had criminal cases pending against them; 889 (11%) with serious criminal cases and 2,208 (27%) were crorepatis, i.e. capable of funding their own election campaigns. Thus, one could conclude that the reforms instituted till date have largely failed and could even be considered responsible for driving parties into a greater dependency on black money, and rich criminal elements to contest elections.
Committees that covered political funding reform The problem with political party funding reform is that the reformer and the reformee are one and the same. In other words, a conflict of interest is built into the system. When pressed to do something by public outrage due to a breaking scandal, a committee will be constituted to study the matter and make suggestions. If public pressure is not maintained, the committee's suggestions will either be implemented in a diluted form, or sometimes, ignored altogether. From the 1960s onwards, the committees that have been constituted have used key terms that indicate the different facets to the problem of political funding reform, which are still relevant today.
Speed money: Gets things done quickly and creates a “tendency to subvert integrity in the public services instead of being isolated and aberrative is growing into an organised, well-planned racket.”Santhanam Committee Report 1964 - Report of the Committee on Prevention of Corruption, pp. 5, 11
Parallel economy: Has been referred to be operating simultaneously and competing with the 'official' economy. Property dealings have been “a significant avenue of illegal deals, with ratios of 'white' and 'black' payments being freely mentioned”.
Delayed action: There has been a great lag in the implementation of committee recommendations. For example, in 1964, the Santhanam Committee recommended the setting up of a Central Vigilance Commission (CVC) as the apex probity watchdog to address governmental corruption. However it achieved the status of statutory autonomous body free from any executive authority only 39 years later, when the Central Vigilance Commission (CVC) Act of 2003 was legislated.
Some of the reforms undertaken are listed below and are the responses of the government of the day to both external and internal pressures to do something. They are broken up by source (who pushed for and/or made it happen) and listed chronologically within each heading to underscore the fact that different times needed different solutions. The Finance Bill 2017, largely considered a regressive bill as concerns political party funding, appears to indicate what can happen when a party comes under intense pressure to generate funds to contest an upcoming election.
Lack of transparency (and coordination): The government established the Vohra committee in 1993—it unequivocally confirmed linkages between crime and politicians. The mandate of the committee was to take stock of all available information about the activities of crime syndicates or mafia which had developed links with and were being protected by government functionaries and political personalities. The report recommended the setting up of a Nodal Cell that would serve as a collection point for relevant information collected by various government agencies such as the Central Bureau of Investigation (CBI), Research And Analysis Wing (R&AW), Intelligence Bureau (IB), Central Board of Excise and Customs (CBEC), Central Board of Direct Taxes (CBDT), Central Economic Intelligence Bureau (CEIB), Enforcement Directorate (ED) and Narcotics Control Bureau (NCB).
Section 11.1 of the Vohra committee report: "In sum, the various agencies presently in the field take care to essentially focus on their respective charter of duties, dealing with the infringement of laws relating to their organisations and consciously putting aside any information on linkages which they may come across."
The final Vohra report did not reveal any specific names of individual politicians or bureaucrats but only stated in a general manner that what was already widely known and talked about for years. All attempts via RTI to get at the minutes and file notings of the meetings that were held by the committee and would have provided real information have failed. The Ministry of Home Affairs (MHA) declined to share the file notings of the committee meetings, terming them as “secret”.
Committee Quotes About Political Funding
Wanchoo committee report, 1970 (Section 2.20): "In this connection, it has been pointed out that large funds are required to meet election expenses and it is common knowledge that these are financed to a great extent by wealthy persons with lots of black money. According to some, this is not the cause but an outlet for black money. The situation is stated to have been further aggravated by the ban imposed recently on donations by companies to political parties." Dinesh Goswami committee report, 1990 (Section 1.6): "The role of money and muscle power at elections ... rapid criminalisation of politics .... increasing menace of participation of non- serious candidates; form the core of our electoral problems." Vohra committee report, 1993 (Section 10.1): "The various crime Syndicates/Mafia organisations have developed significant muscle and money power and established linkages with government functionaries, political leaders and others to be able to operate with impunity". The Supreme Court in its judgement (20/3/1997) in connection with the murder of political activist Naina Sahni: “..have developed an extensive network of contacts with bureaucrats, government functionaries at lower levels, politicians, media personalities, strategically located persons in the non-Governmental sector and members of the judiciary”
Reforms The Representation of the People Act (RPA) of 1951 provided the first set of rules for the conduct of elections to the Houses of Parliament and State Legislatures. Over the years the RPA has been amended to reflect changing circumstances. Political party funding reform has been enacted via changes to the Company Law, via Money Bills, the Income Tax Law, through Supreme Court orders, etc.
Anti Defection Law The Anti-Defection Law was passed in 1985 through the 52nd Amendment to the Constitution. The main intent of the law was to combat “the evil of political defections” by elected politicians for the lure of office.It mainly focus on crime background of any political leader before registering his/her name for election.
Association for Democratic Reforms (ADR)
A writ petition was filed by ADR in the Supreme Court for direction to implement the recommendations made by the Law Commission in its 170th report regarding: Debarring a candidate from contesting elections if charges have been framed against him/her by a Court in respect of certain offences. Candidates be required to furnish details of criminal cases pending against them. Candidates be required to provide true and correct statement of assets owned by them.
A PIL was filed by ADR to bring political parties under the Right to Information Act 2015, on the basis of the ruling by the CIC of 03/06/2013 (see below)
A PIL was filed by ADR requesting the constitution of an independent body to administer enforcement of Foreign Contribution (Regulation) Act, 2010 (FCRA)
Central Information Commission (CIC)
Under Section 293a of the Companies Act, 1956, companies were prohibited from making contributions to a political party or for any political purpose. The ban on company donations was not accompanied by an alternate source of funding as a substitute, e.g. state funding. This greatly increased politicians' reliance on black money to fund elections.
The Companies (Amendment) Act, 1985 permitted companies to make political contributions up to 5% of the average net profit of the last three years provided a resolution authorising such contributions is passed by the Board of Directors and the company discloses the contribution details in its Profit & Loss Account. It has been noted by some observers that companies continued to make donations to political parties in black money preferring the anonymity of this route. The cap was increased to 7.5% in 2013.
Tax filings of political parties remained confidential and were not disclosed to the public until 2008. Using the provisions of the Right to Information Act 2005, the CIC allowed disclosure of parties' income tax returns
The CIC ruled that political parties can be held to be public authorities and come within the ambit of the Right to Information Act Companies Act.
After the CIC ruling, all the political parties banded together and backed "The Right to Information (Amendment) Bill, 2013" which was introduced in the Lok Sabha on August 12, 2013, amending the original act (RTI 2005). The Amendment removes political parties from the scope of the definition of "public authorities". Thus political parties in India no longer fall under the dimensions of RTI. This amendment was met by huge protests from the civil rights societies and the general public.
Confederation of Indian Industry (CII) A task force set up by the CII recommended that corporate contribution by companies be made tax-deductible and that shareholder confirmation of board decisions about political contribution be required. It also recommended state funding of elections with the funds to be raised either by a cess on excise duty or through contributions by industry to an elections fund pool., i.e. a tax on industry to finance campaigns. Money would be distributed according to a formula. Nothing came of this.
Election Commission of India (ECI)
ECI Press Note, 15 January 1998: Partial state subsidy in the form of free time for seven national and 34 state parties on the state-owned television and radio networks totalling 61 hours of each of the two media. The limit of election expenditure imposed on contesting candidates is revised from time to time by the Union of India through the ECI.
Big states: Rs. 40,00,000 for Lok Sabha elections and Rs. 16,00,000 for State Assembly elections.
Big states: Rs. 70,00,000 for Lok Sabha elections and Rs. 28,00,000 for State Assembly elections. According to a study by ADR, analysis of the expenditure statements of candidates to the ECI after the poll results were announced, indicated that the average election expenditure was 49% of the limit imposed. This seems to indicate that these limits have no practical value. There is no limit on the expenditure a party can incur during its election campaigns.