Campaign for finances: State funding of elections

Campaign for finances

Why we should not rush into state funding of elections?

http://www.indianexpress.com/news/campaign-for-finances/763467/

Jagdeep S. Chhokar

Indian Express, Thursday, March 17 2011

In this season of scams, there is one more in the making. There has been a lot of talk about the increasing cost of elections, and state funding is again in the news as a panacea (‘Elections awash in cash’ by M. Veerappa Moily, IE, March 7).

The starting point of all discussions on state funding is the 1998 Indrajit Gupta Committee report. While touting its recommendations, the first paragraph of the “Conclusion” is never mentioned. It says: “The committee cannot help expressing its considered view that its recommendations being limited in nature and confined to only one of the aspects of the electoral reforms may bring about only some cosmetic changes in the electoral sphere.” Coincidentally, the Law Commission of India had undertaken an exercise for “overhauling” the electoral process and submitted its report in May 1999. On state funding, it said: “It is absolutely essential before the idea of state funding (whether partial or total) is resorted to, that the provisions suggested in this report relating to political parties (including the provisions ensuring internal democracy, internal structures) and maintenance of accounts, their auditing and submission to

Election Commission are implemented.... The state funding, even if partial, should never be resorted to unless the other provisions mentioned aforesaid are implemented lest the very idea may prove counter-productive.”

Then came the report of the National Commission to Review the Working of the Constitution (NCRWC) in 2002. Its observation on state funding is: “Any system of state funding of elections bears a close nexus to the regulation of working of political parties by law.... Therefore, proposal for state funding should be deferred till these regulator mechanisms are firmly in position.”

A “comprehensive paper on the campaign finance in foreign countries” published in 1999 by the International Foundation for Election Systems (IFES), and quoted by the Union law minister in his article, also points out that even when public funds are provided to political parties, they continue to use other funds.

Recall the 2009 Lok Sabha elections, when 6,719 of 6,753 candidates declared that they had spent only 45-55 per cent of the Rs 25 lakh limit. This, alongside the clamour that the limit was too low, shows that state funding is not going to solve any of our electoral problems, a fact also noted by the Indrajit Gupta Committee.

The IFES brought out another paper on campaign finance in 2009 in which it said that “disclosure is meaningless unless regulators make information publicly available. (It was) stressed... that civil society must have ready access to usable reports.” In this context, it is worth pointing out that disclosure of assets and liabilities of candidates was bitterly opposed by all parties in the Supreme Court from 2001 to 2003, and the government of the day even issued an ordinance to try to prevent it. Then, in 2007-08, 15 parties fought tooth and nail, in hearings in the Central Information Commission, to prevent disclosure of their income-tax returns.

The IFES paper concludes that at the end of the day, laws must be enforced. What it overlooks is that for laws to be enforced, a precondition is the existence of laws. That is what possibly prompted the Law Commission to point out: “It is necessary to provide by law for the formation, functioning, income and expenditure and the internal working of the recognised political parties.” Further: “It is therefore necessary to introduce internal democracy, financial transparency and accountability in the working of political parties.” The NCRWC too echoed the views of the Law Commission.

The ministry of law put out a background paper on electoral reforms. It mentions seven issues: criminalisation of politics, financing of elections, conduct and better management of election, regulation of political parties, auditing of finances of parties, adjudication of election disputes and review of the anti-defection law. Going by the general sense of the reports of the Law Commission, the NCRWC and the Indrajit Gupta Committee, regulation of political parties seems to be the most pressing issue. It is perplexing that the background paper confines its section “Regulating Political Parties” to select observations of the NCRWC, and even in those the para quoted above is overlooked. The Law Commission’s report is conspicuously missing from that section.

It is hoped that we will not rush into the biggest scam by throwing thousands of crores of good public money after bad money under the garb of state funding, and the historic initiative for electoral reforms started by the law ministry and the Election Commission will not lose sight of critical issues such as internal democracy and financial transparency of political parties.

The writer is a former professor, dean and director in-charge of IIM, Ahmedabad express@expressindia.com