HomeIndiaElection Commission demands ban on cash donations to political parties, writes to...

Election Commission demands ban on cash donations to political parties, writes to the government

The Chief Election Commissioner has suggested several amendments in the RP Act to increase transparency and accountability on the part of candidates.

The Chief Election Commissioner has suggested several amendments in the RP Act to increase transparency and accountability on the part of candidates.

The Election Commission has proposed to reduce anonymous political donations from Rs 20,000 to Rs 2,000 and cash donations by 20%, or a maximum of Rs 20 crore, to clear election donations from black money.

Government sources said Chief Election Commissioner (CEC) Rajiv Kumar has written a letter to Union Law Minister Kiren Rijiju, recommending several amendments to the Representation of the People (RP) Act.

He said that the purpose of these proposals is to improve and bring transparency in the donations received to political parties, as well as to bear the expenses of the candidates who try their luck in the elections.

As per the rules currently in force, political parties have to disclose all donations above Rs 20,000 through their contribution report which is submitted to the Election Commission. Sources said that if the EC’s proposal is approved by the Law Ministry, all donations above Rs 2,000 will be reported, which will increase transparency in funding.

The move comes in the backdrop of a poll panel recently delisting 284 defaulter and non-compliant Registered Unrecognized Political Parties (RUPPs), of which over 253 have been declared inactive. The Income Tax department recently raided several such entities across the country on charges of tax evasion after the Election Commission shared its report with its administrative authority, the Central Board of Direct Taxation (CBDT).

Sources said the commission found that the donations made by some political parties were nil, but their audited statement of accounts showed a large amount of receipts, which proved massive transactions in cash below the limit of Rs 20,000. .

The Election Commission has also sought to restrict cash donations to 20% or a maximum of 20 crores out of the total money received by a party, whichever is less.

Other recommendations

In order to bring transparency in the expenditure incurred by individual candidates contesting elections and to remove “diversion” in this expenditure, the Election Commission has mandated digital transaction or account payee check transfer for all expenditure above ₹2,000 to an entity/individual. requested to make. ,

Government sources said that after the implementation of this amendment to be made in Rule 89 of the Election Conduct Rules, 1961, a candidate will have to and should also maintain a separate account for receipt and payment related to the election. As an account of election expenditure, transparently disclosed to the authorities.

As of now, maintaining a separate bank account for election expenses is part of the directives, but the Election Commission wants it to be part of the election conduct rules.

The Election Commission also wants each candidate to open a separate bank account for election purposes, route all expenses and receipts through this account, and submit these details to his/her election expenditure account.

The Election Commission has also sought “electoral reforms” to ensure that there is no foreign contribution to the funds of parties under the RP Act and the Foreign Contribution Regulation Act (FCRA), 2010.

Sources said, at present, there is no mechanism to specifically segregate foreign donations in the initial stages, and the current format of contribution reports is “not equipped” to capture additional information.

Therefore, the Commission has called for a comprehensive discussion on the subject among various stakeholder Ministries so as to devise a mechanism to identify and prevent prohibited foreign donations.

He said that another area of ​​concern which has been identified by the Election Commission is the violation of foreign exchange rules.

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