Running a political party or an establishment is easier said than done. Each party has its own organisational set-up. They work round the year and are hyper active at when elections are round the corner.
All these involve a whole lot of expenses. A lot of money is required, funds are collected through various means and it is a constant process. All the same, there are many checks and balances. It is also a known fact that no political party can be run with membership fee alone. Herein comes the role of donations. So far, donations upto Rs20,000 required no documentary support.
However, the Election Commission has now come up with a proposal to the government that the Rs20,000 level be brought down to Rs2,000, from whereon records should be in place and be subject to scrutiny. This suggestion from the EC is obviously a proposal of the Damodardass mindset.
Prima facie, this recommendation is not likely to be of any help. Chances are that political parties would then try and avoid depositing money in banks so that they do not have to account for it.
It is safe to assume that this concept is not practical beyond a limit. No country around the world has made a success out of it, other than a small nation called Estonia — and that too to an extent, not totally — so far.
India’s digital penetration is widening, but it still has very little reach beyond urban areas. Even granted that there is some hope that mobile phones will be of help to usher in a digital economy, the level of illiteracy and backwardness of the masses across states is bound to pose its own problems.
Digital network itself is not yet in a position to take the full load. There are also issues of fraudulent activities increasing. The illiterate might be able to make or receive a phone call, but stretching this strength to enable them operate e-wallet systems on their mobile phones could be an invitation to trouble.
This would encourage middle men who, in the garb of helping out, will truly loot and plunder. Even large sections of the educated elite have hesitations in adapting to digital cash transactions beyond the level of using ATM cards. That scare would persist for a very long period and changeover cannot be achieved immediately.
On the face of it, attempts at transparency are good. But ground realities can never be ignored. Making the functioning of political parties more transparent is a good idea. Funds mobilization is not an easy job, and chances are that parties will now devise new ways to overcome the EC hurdle.
If the limit for undocumented donations is brought down to Rs2,000 from Rs20,000 what the parties could be expected of doing is, they would show less of collections and less of expenditure in their record books.
They would produce more vouchers, splitting donations to lower levels of less than Rs2,000. It is likely they would make fictitious lists of hundreds of thousands of people — by taking names from electoral rolls — and seek to fool around with the Election Commission stipulations.
It is not possible for the EC to have a mechanism to go around all these people and check whether they had indeed made the donations. This could even overburden the taxation department and the IT sleuths, who already have too much on their hands past the demonetisation exercise.
Instead of creating a scare, the whole concern of the government should be of how to make paying of tax an attractive proposition to the people. Create conditions in which people are encouraged to pay taxes willingly, rather than scaring them away through punitive actions.
