State Funding: Can It Really Stem The Rot?

The debate on electoral reforms is not new. Way back in the late '60s, during the term of the fourth Lok Sabha, a committee including eminent people like Jaiprakash Narayan, Madhu Limaye, Minoo Masani and V.M. Tarkunde had been set up on the basis of a parliamentary resolution to look into the matter. The National Front government had also constituted a committee under the then law minister Dinesh Goswami. The committee had submitted a comprehensive report in record time. Its suggestions have been gathering dust in the absence of the political will to take the bull of corruption by the horns. Now with the hawala scam threatening to taint the entire polity, the issue has come under focus once again. The Election Commission seems to be getting into the act with Election Commissioner M.S. Gill (see interview) suggesting an all-party meeting to thrash out the issue.

Singh's call found immediate backers from his erstwhile colleagues in the NF-LF alliance. "There should be no dispute on this, but unfortunately the Government is not willing," said Somnath Chatterjee, the leader of the CPI(M) in the Lok Sabha. Senior Janata Dal leader Jaipal Reddy, in fact, wants the Government to go beyond Singh's suggestion. "Mere funding of elections will not be enough. The Government must also assist political parties for their legitimate organisa-tional expenses," he adds. Reddy is not too enthused by the suggestion that if the current hurdles in corporate funding of political parties were removed and if the parties could be forced to submit their accounts to impartial audit, the politics-business-crime nexus could be broken.

"That wouldn't be quite right. Hardly any industrial house would be interested in providing funds to parties like the Janata Dal and the Left," he feels. Instead, he suggests that the State create a corpus by levying a surcharge on the profits of companies. "Parties can then be funded from the corpus on an agreed formula by taking either the percentage votes in the last elections, or the number of seats won into account."

However, BJP's Jaswant Singh feels subsidising campaigns would not be enough to eliminate the role of money power. He says that it is essential that the statutory ceiling on expenditure be made enforceable. As things stand, a Lok Sabha candidate can spend Rs 4.5 lakh on his or her campaign. But the provision added to the Representation of the People Act in 1974 at the behest of the then prime minister Indira Gandhi, exempting candidates from being held responsible for expenditure incurred on their behalf by the party or private individuals, has made a mockery of the ceiling.

The provision has invited adverse comments even from the Supreme Court, which described it as an eyewash. In two separate judgements, the court observed that Section 77 of the RPA which limits expenditure was rendered "redundant" by the appended explanation.

But the Supreme Court finds itself powerless to act in the matter as long as the law remains in the statute books. Where it is making its presence felt, however, is in the area related to financial accountability of political parties. Acting on a public interest petition of Common Cause filed by H.D. Shourie, the court has asked all political parties to file their income-tax returns by 1995-96 by February 20 this year. It was only after the petition came up for hearing that the Department of Revenue of the Government of India sheepishly admitted that the three mainline parties—the Congress, the BJP and the Janata Dal—had never filed their income-tax returns despite it being made mandatory since the amendment to the Income Tax Act in 1978.

Maybe the income-tax returns can be a precursor to compulsory auditing of accounts of political parties. But what H.D. Shourie's petition brought to the fore once again is that merely framing the law on electoral reforms will not help. Laws have to be implemented. Unfortunately, this falls in the realm of the executive, which so far has not shown the necessary will to do it. But there is a glimmer of hope: the judiciary is forcing them to do it.