Originally Published 2013-06-28 00:00:00 Published on Jun 28, 2013
Political parties are the only entities which are not subject to any regulation or regulator. The phrase political parties has not been mentioned in India's constitution and post independence, the legislatures have not enacted any regulation or law governing the functioning of political parties.
Will bringing political parties under RTI improve transparency?
The Central Information Commission's recent decision of bringing political parties (six national parties) under the ambit of the Right to Information Act, 2005, is likely to have far reaching implications for democracy in India. It is assumed that the CIC ruling would pave the way for ending the opacity of funding sources that has become the hallmark of all political parties in the country. It would give citizens access to information regarding the donors of all political parties, the amount of donations, tax exemptions claimed by political parties, expenditure by political parties on renting out office space and also the exorbitant travel expenditure during elections. Not surprisingly, most political parties in a rare display of solidarity have expressed their disagreement over the decision, with the ruling party at the centre calling the decision as "adventurist" in its implications.

Political parties as public authorities

At the heart of the debate is the question whether the political parties qualify as "public authorities" under the RTI Act. The RTI Act defines "public authorities" as a body owned, controlled or substantially financed by the government and constituted by a notification or an order of the appropriate government. The CIC in its order has interpreted the term "appropriate government" as the Election Commission (EC) since registration by the EC is needed for a political party to be recognised as such.

With respect to the provision of substantial funding by the government, it is difficult to ascertain whether political parties meet the "substantial funding" test in the absence of correct reporting by the political parties of their sources of funding as well as paucity of information on the amount of "indirect financing". The political parties (respondents) claimed that construing political parties as public authorities would lead to frivolous petitions engaging the attention of the political parties in replying to such notices. The political parties also contended that in the previous cases of Indian Olympic Association and Sanskriti School being held to be "public authorities", there was enough evidence to substantiate the claim.

However, the only way evidence can be gathered to determine whether there is substantial funding is to declare the political parties as "public authorities". Disclosure and transparency by the political parties are the key principles to determine the sources of funding of political parties by private sources (donations by cheque/cash as well as in kind) as well as the nature and amount of government funding. Declaring political parties as public bodies is a norm in the Scandinavian countries under the domain of their respective freedom of information laws. The Law on Access to Public Information in Poland has provisions for verbal or written requests for access to public information, public data and public assets held by public bodies and private bodies that exercise public tasks such as trade unions and political parties.

It was also contended by the petitioners that disclosing the identity of the donors will lead to harassment by other political parties to whom they haven't contributed. This argument, though valid in the Indian context, must also be placed in the context of a pernicious nexus between political parties and business houses, which has been adequately exposed in the 2G scam as well as the coal scam. The wider implications on public policy and the citizens' right to know must triumph over the "harassment" argument. Disclosing the identity of donors will allay the suspicions of "conflict of interests" that arise by keeping the finances and donors secret. Furthermore, according to Section 8 of the RTI law, information can be denied if RTI queries harm the strategic interests of organizations, or if provision of information will lead to undue costs. The information officer and the appellate authority who are entrusted with deciding the merits of RTI queries will be office-bearers of the parties themselves.

Under the current provisions of the law, all political parties are mandated to file the statement of their accounts with the Income Tax Authority and the Election Commission. In spite of this provision, most donations remain anonymous. The CIC order is likely to introduce more transparency vis-a-vis the funding sources of political parties.

Only six national parties were declared as public authorities on the rationale that the petitions were filed only against them and all 714 registered political parties are not availing substantial funding from the government based on the available evidence. Though declaring all political parties as public authorities is one of the objectives of ADR (the civil society organisation spearheading the fight for transparency within political parties) in future, it should be strictly on the basis of the "substantial funding" test applied to each political party.

Indirect financing

One of the most significant contentions by the petitioners was the indirect financing of political parties by the state. To buttress this point, the petitioners held that all political parties enjoy indirect financing in the form of huge tax exemptions under Section 13A of the Income Tax Act, 1961, allotment of huge plots of land/building in prime locations within the cities either free of cost or at hugely concessional rates and free airtime to all political parties during elections on Doordarshan.

Public character of political parties

All political parties are given statutory status under Section 29A of the Representation of the People Act, 1951. Furthermore, all political parties give tickets to candidates and people vote on party symbols, making them important instrumentalities of democratic governance. Under the tenth schedule of the Indian Constitution, political parties disqualify legislators from State Assemblies and Parliament as well as force them to vote inside the house according to the party whip. The elected candidates of political parties have legislative authority as well as executive authority to make policies affecting millions across the country. These wide ranging powers and functions of the political parties, which are essentially of public nature, are indicative of their public character. It is now an accepted principle of law that the functions of an institution should determine the public or private nature of the entity. The contention that the public character of the political parties as a rationale for declaring them as "public authorities" is a moral argument is no longer valid. This decision also has the potential to scrutinise finances, membership registers and the constitution as well as rules and regulations. Political parties must be mandated to provide the requisite information to the Election Commission periodically which should be made public by putting up the data on their website.

The decision of the CIC is likely to be challenged in the higher courts. Previous CIC orders vis-à-vis "public authorities" have had additional criterion like pervasive control by the government over a body for it to be declared as a "public authority", which was applied in the Rajiv Gandhi Foundation case. The recent decision has not stated any such criterion and it is necessary to have more clarity on the standards that should determine "public authority".

More transparency of political parties also runs the risk of undue interference in the internal functioning of political parties by government agencies. The CIC order has also been criticised on the ground that it would make political parties accountable to the CIC, a yet another bureaucratic institution. The political parties are already accountable to other institutions like Income Tax and Election Commission.

However, this argument has been countered by pointing out that most important organisations are accountable to multiple bureaucratic institutions. For example, all companies in India are regulated under the Company Law. Listed companies have to additionally comply with the Securities and Exchange Board of India regulations. Other institutions like cooperatives, trusts, hospitals, schools, colleges, and NGOs all have a regulatory authority.

Political parties are the only entities which are not subject to any regulation or regulator. The phrase political parties has not been mentioned in India's constitution and post independence, the legislatures have not enacted any regulation or law governing the functioning of political parties. The necessity for more transparency and consequently a regulatory authority has also been acknowledged by the Law Commission of India Report, 1999 as well the Indrajit Gupta Committee on State Funding of Elections 1998. In the light of the fact that the CIC decision is intended to bring more transparency within the political parties, and is likely to lead to more debates in the courts as to the nature of a "public authority", it is a decision in a positive direction.

(The writer is a Research Assistant at Observer Research Foundation, Delhi)

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