Pol parties funding "loosely" governed under law: CEC

Funding of political parties in the country is "loosely governed" under the law and almost eighty per cent of their total funds escape "scrutiny" owing to lack of required laws in this regard, Chief Election Commissioner (CEC) Nasim Zaidi said here today.
Zaidi, while addressing a global conference on the influence of money power in the electoral process, said it was high time that electoral reforms, which entail enactment of better laws to regulate money usage used in polls by parties and candidates, are ushered in.
"Political parties, as loosely governed under the law, they can raise any amount of resources barring contribution from government company and foreign donations and they can spend any amount of money during election campaign in a constituency if it is related to general party propaganda," he said.

The CEC said the limits for donations to be made by corporates to political parties has increased over the period of time and hence, "this has increased the scope of receiving and spending more money at constituency level (by parties)."
He also talked about monetary contributions exempt from being reported to the EC and their ramifications.
"The only legal requirement for political parties is to make annual contribution report to the EC," he said, adding contributions of below Rs 20,000 are "escaping scrutiny of the EC and the public."

"We send these reports to the Ministry of Corporate Affairs, Ministry of Home Affairs and the Income Tax department for appropriate action at their end...Data with us suggests that out of the total funds available with political parties, contribution amount of less than Rs 20,000 constitutes 80 per cent of total funds.

The CEC said data with the EC suggests that electoral
trusts are "also increasing the level of funding to political parties."
"Another interesting part is electoral trusts can receive any amount of donations from any person excepting a government company and make any amount of contribution to political parties. The legal regime for regulation of trusts does not even exist under the Representation of the People Act.
"Trusts are not required to maintain, audit and publish their accounts. There are no declarations or disclosure requirements for electoral trusts nor there is any penalty for non-compliance of these requirements...There is no provision that bars trusts from receiving foreign funds and in the EC we have suggested a law on this aspect otherwise foreign funds can find a route through electoral trusts and we are receiving complaints in this regard," he said.

Zaidi said the answer to all these questions and implications lie "in regulating resources and their use by political parties and candidates.