India lacks transparency in political donations

India one of 9 nations that let netas receive anonymous funds

India may seek a place at the world stage among developed democracies but does not quite share their transparency in political finance. Analysis by the Stockholm-based International Institute of Democracy and Electoral Assistance (IDEA) shows that India is one of nine among 37 countries in the Asian region and among a mere 10% of countries in the world to allow either political parties or candidates to receive anonymous donations. 

The other countries in the Asian region include Afghanistan, Armenia, East Timor, Jordan, Lebanon, Turkey, Turkmenistan and Yemen.
India also allows for individual candidates to receive anonymous donations while parties cannot. Experts say that although the discrepancy in regulations between parties and candidates is not unique to India, it represents a legal loophole whereby donations can be channeled via the candidate with less reporting requirements. Of the 37 countries that comprise Asian region, it is only in nine where anonymous donations are allowed to one (candidate or party) but not the other. In most cases, anonymous donations are banned for both parties and candidates. 

In India, this limit of allowed anonymity is set at Rs 20,000. In some instances this can be counteracted since donors can avoid the legal obligation to be identified by donating multiple sums amounting to less than the maximum amount. Many countries like the United States have mandated a ban on cash contributions exceeding $100 by a single individual with political action committees (PACs), candidate committees and party committees required to file periodic reports. 
In India political parties have pleaded waiver from the RTI Act on the ground that they disclose their funds and campaign expenditure to the Income Tax department and the Election Commission. Social activist Aruna Roy who has been campaigning for deferment of the RTI amendments dismissed these claims saying the I-T department was seen as corrupt and the EC was not structured or given the wherewithal to scrutinize political finances. "In this climate of transparency and accountability the position taken by political parties is a stepping back," she said.

According to former information commissioner in the Central Information Commission (CIC) Shailesh Gandhi most money in politics was "black money" for which there is no accountability. Gandhi said, "This is a lie. No one believes this. The EC and the IT department have such a cozy relationship with political parties. Otherwise how is it possible that in all these years neither the EC nor the IT department have scrutinized any candidate from a political party to see if their affidavits to the two agencies do not match." 

Similar concerns were raised by the Global Integrity Report 2011 that had put India's score at 70 out of 100. The country had dismally performed on individual candidate financing and scored a paltry 28. 

It points out that disclosure requirements for individuals and parties are legally enshrined in countries like Algeria, Georgia, Uganda and Venezuela while a handful of countries do not have "minimum regulations to govern donations. This is true of Armenia, Burkina Faso, India, Malawi and Zimbabwe which do not place restrictions on individual donors because such legislations remain non-existent. The most significant weakness lies in the enforcement and implementation of these laws and regulation".