At the heart of the debate on electoral reforms lies the vexed issue of campaign finance reform. The four fundamental questions that need to be answered to understand this conundrum are: how are electoral processes currently funded? How much should a candidate and a political party be allowed to spend on an assembly or a parliamentary campaign? How to ensure that the source of electoral funding is legal and accounted for to tax authorities? Finally, how to police the whole process?
Candidates for public office are invariably funded in myriad ways and at multiple levels. The principal funding comes from the political parties they represent, corporate houses and even private individuals. The Indian diaspora is also a top-dollar contributor to electoral campaigns. A significant part of the funding to candidates also comes from government officials, from the patwari to the highest echelons of the bureaucracy, for current or future patronage. Politicians funding their personal campaigns in entirety are also growing phenomenon.
The second issue is: what rationale should be used to determine an electoral expense ceiling? It is possible to fight a Lok Sabha election with Rs 25 lakh (which is the permissible limit now), and also possible to burn through Rs 25 crore (which certain candidates are rumoured to have spent). Given this level of variation, there is a real dilemma in finding a reasonable limit for expenditure.
The government has already accepted the Election Commission's recommendation to increase the limit to 40 lakh. One can ask how Rs 40 lakh is any better than Rs 25 lakh when crores are in play? Then, why shouldn't money spent by a political party in a constituency be counted towards the expenditure incurred by its candidate? After all, it is being spent for and on behalf of the candidate.
Instead of prescribing an arbitrary limit, the Election Commission should float a consultation paper specifically on, and limited to, the issue of campaign finance reform, hold open discussions with people across the social and economic spectrum including civil society and election watchdogs, meet representatives of political parties under Chatham House rules to get the real picture, and then arrive at the ceiling on election expenditure - which must be reviewed after every Lok Sabha election.
The third issue is how to ensure that legitimate funding drives electoral campaigns. As a first step, the entire regime of corporate funding needs to be revisited by relaxing the irrational limit prescribed by Section 293-A of the Companies Act that places a 5 per cent cap on net profits that can be contributed to a political party. Why should it be 5 and not 50 per cent of net profits? There should be no ceiling in law. It should be between the management and the shareholders to decide the level of contribution that a corporate wants to make. The government should only ensure that companies contributing are legitimate business entities and not mere money-laundering fronts.
Even if you liberalise the regime, corporate groups would still prefer to pay in cash because of the coercion and the element of vendetta that accompanies these transactions.
To surmount this reality, the government must, by law, establish an independent campaign finance trust to be chaired by a former president of India, consisting of a former vice president and former chief justice of India as its trustees. This trust would receive funding from corporate entities, NGOs, individuals and others, as well as confidential advice as to which political party the funds should be transmitted.
The recipient must be a political party registered with the Election Commission. No court of law or any right to information request should go into the advice given, unless the trustees themselves find that a receipt is suspect and order an investigation into its origin. All the funds from diverse sources which are advised for a particular political party can then all be bundled up and one cheque every quarter or half-year could go to that registered political party. This would ensure both the anonymity of the contribution and that there is insurance against coercion. Thus by protecting the confidentiality of the transactions, corporate houses and others could be encouraged to contribute by cheque.
The final question is: how to police and regulate a reformed architecture of electoral finance? A possible solution could be the setting up of three-member exclusive election tribunals in each state, headed by a retired Supreme Court judge and including two retired judges of the high court.
These tribunals would be empowered to hear election petitions, with only a statutory appeal straight to the Supreme Court, so that the entire legal journey can culminate in a final decision in 18 to 24 months. If the panel of observers appointed by the Election Commission makes a consensus reference to the tribunal that a candidate is violating or the winner has violated the expenditure ceiling, and the tribunal makes a prima facie assessment that there is merit to the report, it can disqualify a candidate during the campaign process or the winner even after the results are declared - thereby shifting the onus on him to dispute the findings of the observers and establish his innocence.
A related but standalone issue is that of state funding of elections. The moot question remains: how to ensure that other forms of funding can be stopped if state funding is brought into play? Yogendra Yadav's proposal, of reimbursing candidates per vote secured, is an interesting idea that needs to be explored and developed further - with the caveat that it should only qualify a candidate polling at least 20 to 25 per cent of the valid votes cast, and private funding is effectively policed if not eliminated.
(The writer is a lawyer and Congress MP. He is an Advisor to Observer Research Foundation)
Courtesy: The Indian Express
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