Wednesday, 19 April 2017

Political donations, a quid pro corruption

A political donation, in general is defined as, is a gift made to, or for the benefit of a: political party; third-party campaigner; or. person or entity who uses the donation to make another political donation, or who incurs electoral expenditure, or who reimburses a person who incurred electoral expenditure.

The political funding in India began in 1920s when Congress under leadership of Mahatma Gandhi began fund raising from business houses and individuals for freedom struggle. The companies and individuals donated generously for what they considered a “noble cause”. This practice continued even and became increasingly politicized.  The fund raised by political parties now was mainly to run everyday affairs of the party and to fight and win elections. All political parties today rely on both legitimate and illegitimate sources for money. While the practice of financing by corporate and businessmen continued, it was supplemented by kickbacks and commissions received from the foreign deals. In most cases, the beneficiaries were the ruling parties which struck these deals. 

The current Indian laws allow companies to contribute up to 7.5% of their average net profits in the last three financial years to political parties, and require they disclose the name of the political parties that have received those donations. The new amendments (of March 2017) seek to remove that limit, as well as do away with the requirement that companies disclose which political parties have received the funding. However, all the contributions to political parties by companies will have to be made only by a cheque, a bank draft or by other electronic means. Companies will also have to disclose the total amount donated. Any sum contributed, by non cash instruments, by an eligible assessee to any political party or Electoral Trust is eligible for deduction under Income Tax Act, 1961.

  • Political donations corrupt democracy in many unimaginable ways.
  • Why would a corporation, which is bound by law to pursue profits, make these donations?
  • Most politicians enter politics for ideological reasons. They want to contribute and make the country a better place. However, the primary game of politics in a democracy is one of vote winning. You can’t implement your policies if you’re not elected and once elected the most important thing is to be re-elected so that you can continue your work improving the country. As a result, many politicians sell their soul in order to prolong their political careers. They face the choice of openly and honestly standing up for what they believe, or maximizing their vote. To put it bluntly, they either lie or they lose. Their contempt for voters and for democracy is a predictable product of the conflicting pressures politicians face.
  • Representing voters interests is never a politician’s top priority. Politicians will only act on behalf of voters if no wealthy or powerful group objects when the party in question is boxed into a corner by a hung parliament or a combination of marginal electorates and strong community action.
  • Politicians lie in many instances, they have no choice but to do so. The honest ones are highly unlikely to succeed in forming government. 
  • Wining power through four principle strategies:
    (1) Lie about the record of the government they were trying to replace.
    (2) Make promises to the electorate they knew they wouldn’t keep.
    (3) Make promises to corporate donors they intended to keep.
    (4) Excuse breaking the promises to the electorate by inventing a debt crisis.
  • Russell Brand in his interview with BBC, argued that we should not vote and that voting only legitimizes a fundamentally illegitimate system.

Russell Brand in his interview with BBC

    • Sizable amounts are donated in cash i.e. tax evaded money or black money. This must banned altogether.
    • Large businesses houses give away political donations to both opposing large parties, indicating that they are least bothered about political principles but only focused on policy favors from winning party for maximizing their profits.
    • Foreign company donations are nothing but corruption money laundered back using hawala channels and is an anti-national, anti-democratic step. Hence must be banned.
    • Every Re. 1 collected by political parties as donation will result in loss of more than Rs.100 to exchequer/nation with dilution of policies, inflating estimates, undeserving favors etc. 
    • Hence any kind of political donation by business houses is corruption & quid pro quo and must be banned. 
    • Any kind of concessions availed by political parties from businesses for campaigning or organisational expenses, in cash or otherwise, should be viewed as corruption and must be dealt with accordingly.
    • Tax exemption for political donations should be removed. Donations from individuals from their tax paid incomes should be free of restrictions & obligations. 
    • Parties running expenses and election campaign expenses, now a days, are huge and mind boggling primarily due to unbridled flow of ill gotten money from business houses. 
    • Even a petty politician's life style expenses are few millions per month, these days. 
    • With silly money at their disposal, political parties have increased their organisational & campaign expenses to unimaginable levels threatening the very survival of democracy. 
    • Today politics have become out of reach for a common man and law abiding citizen. Most visible politicians are all criminals, extortionists, black market dealers, bootleggers, smugglers, money launderers, tax evaders etc either directly or through agents.
    • Corruption and flow of ill gotten money can't be justified irrespective of the purpose it might be used for. It is the headache of political parties to mobilize funds for their legitimate activities within the framework of laws.
    • BJP & Congress are most funded parties. While BJP donations are 90% from unknown sources/ voluntary contributions/ sale of publications etc, for Congress it is 55%. Political funding must be made transparent, uploaded in their website and audited by independent agencies.

    In 1952, during the course of election campaign for 1st Lok Sabha elections in Bihar, Nehru spotted a Congress candidate campaigning on bicycle without footwear and wearing soiled clothes. Moved by this, he gave Rs.25,000 for buying clothes, chappals and campaign expenses. The candidate won the election and met Nehru in Delhi and returned 24,000+ cash deducting expenses of one pair clothes and one pair chappals only. His total expenditure for winning MP seat was few hundred rupees only then in 1952 whereas the same could be anywhere up to Rs.100 crores today in 2017.

    My view:
    Government directly funding (up to 2/3rd of estimated normative expenses or actual expenses whichever is lower) national & state political parties and its contesting candidates is with least burden on nation. It also creates level playing filed for contesting candidates. Excepting individual non-cash donations from his/her tax paid income all types of donations/ concessions to political parties should be banned. Extravagant spending by candidates should be disqualified and parties penalized heavily. Also impractical bonanza dole outs should be declared illegal. Winning party must be compelled to fulfill its manifested poll promises with in the term. All convicted criminals, must be debarred in contesting elections. Any person facing criminal charges with liability in excess of 2 years imprisonment must be debarred in contesting elections, until absolved in court.

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