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Q. Donations to political parties: Comment on recent report of one-third donations to political parties comes from unknown sources.
Jan 28, 2017 Related to : GS Paper-2

Ans :

Introduction-

According to an analysis by the Association for Democratic Reforms, 69% of funds and contributions received by political parties from 2004-05 to 2014-15 came from unknown sources. The known donors and sources of fund contributions to national and regional parties account for less than one-third of their total fund received.

Issue-

  • According to income tax law parties need not disclose the names of those donating up to ₹20,000. To enjoy income tax exemption, they need to maintain records only of those who donate sums above 20,000. 
  • This provision effectively gives political parties the required cover to pass off sizeable donations as small contributions from anonymous donors.

Analysis-

  • As per income tax returns and statements submitted to the Election Commission, six national and 51 recognised regional parties together had an income of ₹11,367.34 crore during this period.
  • But only ₹1,835.63 crore came from named donors, while other declared sources such as sale of assets, bank interest, membership fee and sale of publications accounted for ₹1,698.73 crore.
  • Above data shows that total income of ₹7,832.98 crore came from unknown sources. Political parties are misusing this provisions of Income tax and converting illegal funding into small donations, which promotes corruption in governance.
  • Hence t0 contain money power from electoral politics, it is necessary to bring funding of political parties under RTI act. So that the list of donors, regardless of size of contribution, will be open to public scrutiny.
  • Hence there necessity to have regulatory authority to receive authentic reports on political funding, scrutinise them and put them in the public domain. Transparency in funding is essential to ensuring clean, democratic governance.

Conclusion-

The recent findings of one-third money comes through unknown donors have once again the reflected money power and corruption in the governance of the nation. Such a unknown donations need to be curtained by bringing political parties under RTI act. To ensure democratic governance, there is necessary to ensure transparent funding.


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