Business Standard

Bhupesh Bhandari: For politicians, it's all a party!

It is about time that political parties came clean on their financial accounts

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An item buried in the inside pages of a newspaper earlier this week caught my attention. Here’s the lowdown. Akhilesh Yadav, the current chief minister of Uttar Pradesh, had bought some property at Hazratgunj in Lucknow, the toniest neighbourhood of the state capital, on January 31, 2005, from a Delhi businessman for an undisclosed sum, the report said. The rights to the property were acquired by him jointly with his wife, Dimple. But it was government land and Yadav was required to pay a fee for converting it into a free-hold property. On June 24, 2005, the land’s classification was changed after Yadav paid Rs 44.67 lakh for it. Yadav, the report added, had deposited the money in cash the day before in the Lucknow branch of State Bank of India and withdrawn the money the same evening, obviously to pay the government for converting the land from Nazul to free-hold. This cash transaction aroused the suspicion of the income-tax department which demanded an explanation from Yadav.

This is where it gets interesting. Yadav said the cash was a loan given to him and his wife by the Samajwadi Party. Two months later, on August 24, the money was repaid to the party. The income-tax department has lost the case in the Income-Tax Appellate Tribunal. (It had imposed a penalty on Yadav because the loan was given to him in cash and not by cheque or draft; rules say all loans above Rs 10,000 have to be paid by cheque or draft. Yadav had pleaded that he was ignorant of the law.) The case sounds very similar to the recently-exposed National Herald affair where it came to light that the gave loans of up to Rs 90 crore to The Associated Journals, the company that owned the newspaper. The newspaper was acquired by Young Indian, a company owned 76 per cent by and her son, Rahul, along with the liability of Rs 90 crore for Rs 50 lakh. And then, the Congress decided to write off the loan.

The two incidents have uncovered a new facet of Indian politics: money in the party’s coffers is given freely to its leaders. It now proves beyond doubt that political parties are the personal fiefdoms of their leaders. Governance standards here are as abysmal as the worst promoter-driven companies. Do those who contribute to know to what use their money is being put? Or, to look at it differently, because they know their money is used in such a way, is this why businessmen donate freely to party funds? Did the Congress and Samjawadi Party do these transactions in a transparent way, making full disclosures to the party's rank and file? It is about time that parties came clean on their accounts. Many of them have sizeable income statements. There is no reason why these statements shouldn’t be out in the public domain.

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