'Proposal on political funding unclear'

'Proposal on political funding unclear'

Experts divided over the efficacy of the move

Legal luminaries, political leaders and analysts are divided over the efficacy of the government’s proposed move that is being viewed as a means to legitimise the flow of “tainted” money as campaign donations.

A top jurist said that since donations to political parties can never be “charitable” in nature, the Centre’s proposal was ill-advised. It also “lacked clarity” as it does not spell out whether the source of the contributions would have to be “revealed” by the donors.
“Donations are welcome but they could be an easy way to launder black money if disclosure of  the source is not made mandatory. Transparency on political funding, as in the West, is a must before exemption is allowed,” said a senior political leader not willing to be identified. 

The Congress and the BJP have approved of Union Finance Minister Pranab Mukherjee’s announcement on making cash contribution to political parties exempt from taxation. They have likened the exemption “to electoral trusts” which could be set up to route funds to political parties. The Left parties have opposed the move with the CPM saying such a proposal would become the “fountain-head of political corruption”.

Jagdish Shetter, who was economic advisor to former Prime Minister A B Vajpayee, says that “corporate houses like the Tatas already have a trust which donates funds to political parties“. In the US, large corporates or business tycoons publicly identify themselves with political parties and are never victimised by the winning party. In our country there is no transparency”, he observed. While welcoming the move, Shettar said the proposal lacked vision and clarity in respect of who would set up trusts -- the government, corporate houses or individuals -- and whether disclosure of the source of money was obligatory on the donors.

Senior advocate and constitutional expert Rajiv Dhawan said under the law donation to political parties “can never be charitable”. Charitable donations can be to an organisation or trust for eradication of poverty, spread of education, but “where is charity in politics? Politics is not a charity”, he says, leaving no doubt on what he thought of Mukherjee’s proposal.

“I would have appreciated, had the donation been given to a neutral fund.  It is not legitimate to deduct tax at the cost of public good.  It will not root out corruption. Black money will not disappear. There will always be under-the-table deals”, he emphasised.
DH News Service 

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