GS Paper: Representation Of People’s Act

The Election Commission’s ongoing drive to clean up the electoral space has now gone beyond RUPPs (registered unrecognised political parties) to cover recognised national and State parties.

What is Political Funding?

• Political Funding implies the methods that political parties use to raise funds to finance their campaign and routine activities.
• A political party needs money to pitch itself, its objectives, and its intended actions to get votes for itself. (Reference)

Why need political funding?

• Across the world, political parties need access to money in order to reach out to the electorate, explain their policies and receive inputs from people.
• And in order to do the same, parties resort to political party funding.

Generally who makes these funding?

• Individuals: One of the primary sources of this funding is voluntary contributions made by individuals.
• Corporates: Besides this, corporates pay hefty donations to parties in different forms.
• Foreign aid: This is yet another source but highly controversial.

Statutory Provisions

• Section 29B of the Representation of the People Act (RPA) entitles parties to accept voluntary contributions by any person or company, except a Government Company.
• Section 29C of the RPA mandates political parties to declare donations that exceed 20,000 rupees. Such a declaration is made by making a report and submitting the same to the EC. Failure to do so on time disentitles a party from tax relief under the Income Tax Act, 1961.

Methods used by Indian Political Parties

1. Individual Persons: Section 29B of RPA allows political parties to receive donations from individual persons.

 

2. State/Public Funding: Here, the government provides funds to parties for election related purposes. State Funding is of two types:

• Direct Funding: The government provides funds directly to the political parties. Direct funding by tax is prohibited in India.
• Indirect Funding: It includes other methods except direct funding, like free access to media, free access to public places for rallies, free or subsidized transport facilities. It is allowed in India in a regulated manner.

 

3. Corporate Funding: In India, donations by corporate bodies are governed under the Companies Act, 2013. Section 182 of the Act provides that:

• A company needs to be at least three years old to be able to donate to a political party.
• Companies can donate up to 7.5% of average net profits made during three simultaneous preceding financial years. (Now removed after Finance Act, 2017)
• Such contributions must be disclosed in the company’s profit and loss account. (Removed)

 

4. Electoral Trusts: A non-profit company created in India for orderly receipt of voluntary contributions from any person like an individual or a domestic company.

• According to the Election Commission Guidelines, all electoral trusts formed after January 2013 are required to declare details of the money received and disbursed.
• The Central Government rules mandate these firms to donate 95% of their total income to registered political parties in a financial year.

Issues with Political Funding

• Money laundering: One of the biggest disadvantages of the corporate funding is the use of fake companies to route black money.
• Influence of contributor: Influence of people and companies over political parties to which they provide funds.
• Election malpractices: There are various gaps in Indian rules, the benefit of which political parties take to avoid any kind of reporting.
• Money politics: Hidden sources of funding lead to more spending of funds in election campaigns, thus impacting the economy of the country.

Recent steps taken

• FCRA Reforms: In March, 2018, the government passed a key amendment to the Foreign Contribution Regulation Act, 2010 allowing foreign companies to fund political parties in India.
• Electoral Bonds Schemes: The government notified the Electoral Bond Scheme on 2nd January, 2018 to establish and cleanse the system of political funding in the country.

What is Electoral Bond Scheme?

• An electoral bond is a bearer instrument like a Promissory Note.
• It can be purchased by any citizen of India or a body incorporated in India to donate to the political party of their choice.
• Donor’s name is not there on the bond.
• These bonds can be used for making donations to the political parties registered under Section 29A of the RP Act, 1951.
• The party should have secured not less than one per cent of the votes polled in the last general election to the Lok Sabha or a Legislative Assembly.

Issues with the scheme

• Opaque funding: While the identity of the donor is captured, it is not revealed to the party or public. So transparency is not enhanced for the voter.
• No IT break: Also income tax breaks may not be available for donations through electoral bonds. This pushes the donor to choose between remaining anonymous and saving on taxes.
• No anonymity for donors: The privacy of the donor is compromised as the bank will know their identity.
• Differential benefits: These bonds will help any party that is in power because the government can know who donated what money and to whom.

Way forward

Former Chief Election Commissioner SY Quraishi has suggested an alternative worth exploring:

• A National Electoral Fund to which all donors can contribute.
• The funds would be allocated to political parties in proportion to the votes they get.
• Not only would this protect the identity of donors, it would also weed out black money from political funding.
• There can be a tax benefit for those who donate to the fund.

 

Try this question from our AWE Initiative

Q.2) Examine the issues with political funding in India. How far has the introduction of electoral bonds succeeded in dealing with the issues with political funding? (10 marks)

 

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Jharkhand CM’s chair remains uncertain as the Election Commission (EC) is understood to have conveyed its decision in an office-of-profit complaint against him to the Governor.

Why in news?

• Under Section 9A of the Representation of the People Act, 1951, the CM could face disqualification for entering into a government contract.
• The Constitution of India does not define the Office of Profit. It has only mentioned it under Article 102 (1) and Article 191 (1).

What is Office of Profit?

• MPs and MLAs, as members of the legislature, hold the government accountable for its work.
• The essence of disqualification is if legislators hold an ‘office of profit’ under the government, they might be susceptible to government influence, and may not discharge their constitutional mandate fairly.
• The intent is that there should be no conflict between the duties and interests of an elected member.
• Hence, the office of profit law simply seeks to enforce a basic feature of the Constitution- the principle of separation of power between the legislature and the executive.

What governs the term?

• At present, the Parliament (Prevention of Disqualification) Act, 1959, bars an MP, MLA or an MLC from holding any office of profit under the central or state government unless it is exempted.
• However, it does not clearly define what constitutes an office of profit.
• Legislators can face disqualification for holding such positions, which bring them financial or other benefits.
• Under the provisions of Article 102 (1) and Article 191 (1) of the Constitution, an MP or an MLA (or an MLC) is barred from holding any office of profit under the Central or State government.

An undefined term

• The officials of the law ministry are of the view that defining an office of profit could lead to the filing of a number of cases with the Election Commission and the courts.
• Also, once the definition is changed, one will also have to amend various provisions in the Constitution including Article 102 (1) (a) and Article 109 (1) (a) that deal with the office of profit.
• It will have an overarching effect on all the other sections of the Constitution.

Factors constituting an ‘office of profit’

• The 1959 law does not clearly define what constitutes an office of profit but the definition has evolved over the years with interpretations made in various court judgments.
• An office of profit has been interpreted to be a position that brings to the office-holder some financial gain, or advantage, or benefit. The amount of such profit is immaterial.
• In 1964, the Supreme Court ruled that the test for determining whether a person holds an office of profit is the test of appointment.

What is the ‘test of appointment’?

Several factors are considered in this determination including factors such as:

1. whether the government is the appointing authority,
2. whether the government has the power to terminate the appointment,
3. whether the government determines the remuneration,
4. what is the source of remuneration, and
5. the power that comes with the position.

 

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The Supreme Court has said that it would consider a plea seeking a lifetime ban on people convicted of offenses from contesting elections and becoming MPs and MLAs.

Why such petition?

• The petition has made a very logical argument that even a constable can lose his job after conviction for corruption.
• The Centre maintained affirmation on the existing (namesake) bar of disqualification was enough for legislators.
• The disqualification under the Representation of the People Act of 1951 is the period of prison sentence and six years thereafter.

What did the Centre argue against lifetime ban?

• In 2017, the ECI endorsed the call for a life ban in the top court. This was a boost for the cause of decriminalisation of politics.
• In Dec 2020, the Centre rejected the idea of a lifetime ban on convicted persons contesting elections or forming or becoming an office-bearer of a political party.
• It had reasoned that MPs and MLAs were not bound by specific “service conditions”.
• They are bound by their oath to serve citizens and country along with propriety, good conscience and interest of the nation.

Criminalization of politics: Indian Case

• The criminalization of politics has become a headache for the Indian democracy and it is a harsh reality now.
• Criminalization of politics in India includes political control of the police, state money, corruption, weak laws, lack of ethics, values, vote bank politics and loopholes in the function of the election commission.
• Deep down, it’s a large nexus of police, money, corrupt bureaucracy, casteism, religion and the drawbacks of functioning in the election commission.

Why are tainted candidates inducted by political parties?

• Innocent until proven guilty maxim: The other reason offered by political parties is summarised by the maxim of Indian law, which is that any accused is innocent until proven guilty.
• Popularity: Such candidates with serious records seem to do well despite their public image, largely due to their ability to finance their own elections and bring substantive resources to their respective parties.
• Prospected victory: The logic of a candidate with criminal charges doing better for the cause of people of is another flawed argument.
• Destabilizing other electors: Others do not seek to punish these candidates in instances where they are in contest with other candidates with similar records.
• Vested interests: Some voters tend to view such candidates through a narrow prism: of being able to represent their interests by hook or by crook.

A harsh reality of Political Asylum

• The NN Vohra committee’s report on the criminalization of politics discussed how criminal gangs flourish under the care and protection of politicians.
• Many times the candidates themselves are the gang leaders.
• This protection is paid back to them during elections through capital investment in election spending and voter support.

Issues with Criminals in Politics

• Morality of the process: It is extremely important that the people who enter the field of politics have a clear image and high moral character.
• No rule of law: A leader with criminal character undoubtedly tends to undermine the rule of law.
• Violation of right to equality: There were 4.78 lakh prisoners (as of December 2019) of whom 3.30 lakh were under trial, i.e. not yet proven guilty.
• Problem of undertrial: An “innocent” undertrial cannot vote, but a man chargesheeted for murder can even contest election from jail.

Supreme Courts guidelines in this regard

The Supreme Court earlier in Feb 2020 had ordered political parties to publish the entire criminal history of their candidates for Assembly and Lok Sabha elections.

• Reasons for nomination: It has also asked for the reasons that goaded them to field suspected criminals over decent people.
• Publication of records: The information should be published in a local as well as a national newspaper as well as the parties’ social media handles.
• 48hr time frame: It should mandatorily be published either within 48 hours of the selection of candidates or less than two weeks before the first date for filing of nominations, whichever is earlier.
• Contempt for non-compliance: It also ordered political parties to submit compliance reports with the Election Commission of India within 72 hours or risk contempt of court action.
• No escape: The judgment is applicable to parties both at Central and State levels.

Immediate Reason for Judicial Action

• The immediate provocation is the finding that 46% of MPs have criminal records.
• The number might be inflated as many politicians tend to be charged with relatively minor offences —“unlawful assembly” and “defamation”.
• The real worry is that the current cohort of Lok Sabha MPs has the highest (29%) proportion of those with serious declared criminal cases compared to its recent predecessors.

Way forward

(1) ECI suggestion on vendetta politics

The ECI has suggested some safeguards against vendetta politics.

• First, only offences that carry an imprisonment of at least 5 years are to be considered.
• The case against the candidate should have been filed at least six months before the scheduled elections for it to be considered.
• And finally, a competent court must have framed the charges.

(2) Speedy trials

• An alternative solution would be to try cases against political candidates in fast-track courts.
• The SC had sent a directive in 2014, directing that cases against political candidates must be completed within a year, failing which the matter should be reported to the CJs.

(3) Legislative reforms

• We must have a law which debars persons with serious criminal cases from entering the assemblies and the Parliament.
• There must be stringent criteria in Representation of Peoples Act as well.

(4) Revamping Criminal Justice System

• The criminal justice system must be revamped as recommended by the Malimath Committee.
• An institution comprising representatives of the police/CBI/NIA, IB, IT department, Revenue Intelligence and Enforcement Directorate should be set up to monitor the activities of the mafia and criminal syndicates in the country.

 

 

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The Supreme Court has said that Parliament may not be able to effectively debate the issue of doing away with “irrational freebies” offered to voters during elections, saying the “reality” is that not a single political party wants to take away freebies.

Why in news?

• The freebies were paving the way for an “economic disaster” besides “distorting the informed decision of voters”, CJI said.

What did the CJI say?

Ans. Compose a non-partisan panel

• The court suggested setting up a specialized body composed of persons who can “dispassionately” examine the problem.
• The court directed the parties to make “suggestions for the composition of a body”.
• It proposed that this body could examine ways to resolve the issue of freebies and file a report before the Centre or the Election Commission of India (ECI).
• The court said once the parties come up with suggestions on the composition of such a body in a week, it would pass orders.

What is Freebie?

• The term Freebies is not new; rather it is a prevalent culture in Indian politics (in the name of socialism).
• The political parties are always trying to outdo each other in luring the Indian voters with assorted freebies.
• From free water to free smartphones the Indian politicians promise everything to attract prospective voters in favour.
• This trend has gained more momentum in the recent times with the political parties being innovative in their offerings as the ‘traditional free water and electricity’ is no longer sufficient as election goodies.

Examples of freebies

1. Promise of Rs 15 lakh in our bank accounts
2. Free TV, Laptops
3. Free electricity
4. Loan waivers
5. Offering free public transport ride to all women in Delhi

Why are such policies popular among the public?

• Failure of economic policies: The answer lies in the utter failure of our economic policies to create decent livelihood for a vast majority of Indians.
• Quest for decent livelihood: The already low income had to be reoriented towards spending a disproportionately higher amount on education and health, from which, the state increasingly withdrew.
• Prevailing unemployment:  Employment surveys have shown that employment growth initially slowed down from the 1990s, and then has turned negative over the past few years.
• Increased cost of living: Real income growth of the marginal sections has actually slowed down since 1991 reforms.
• Increased consumerism: The poor today also spend on things that appear to be luxuries; cellphones and data-packs are two such examples which are shown as signs of India’s increased affluence.
• Necessity: For migrant workers, the mobile phone helps them keep in touch with their families back home, or do a quick video-call to see how their infant is learning to sit up or crawl.

Can Freebies be compared with Welfare Politics?

• These freebies are not bad. It is a part of social welfare.
• Using freebies to lure voters is not good.
• Voter’s greediness may lead to a problem in choosing a good leader.
• When we don’t have a good leader then democracy will be a mockery.

Impact of such policies

• Never ending trail: The continuity of freebies is another major disadvantage as parties keep on coming up with lucrative offers to lure more number of votes to minimize the risk of losing in the elections.
• Burden on exchequer: People forget that such benefits are been given at the cost of exchequer and from the tax paid.
• Ultimate loss of poors: The politicians and middlemen wipe away the benefits and the poor have to suffer as they are deprived from their share of benefits which was to be achieved out of the money.
• Inflationary practice: Such distribution freebie commodity largely disrupts demand-supply dynamics.
• Lethargy in population: Freebies actually have the tendency to turn the nation’s population into: Lethargy and devoid of entrepreneurship.
• Money becomes only remedy: Everyone at the slightest sign of distress starts demanding some kind of freebies from the Govt.
• Popular politics: This is psychology driving sections of the population expecting and the government promptly responds with immediate monetary relief or compensation.

What cannot be accounted to a freebie?

• MGNREGA scheme (rural employment guarantee scheme)
• Right to Education (RTE)
• Food Security through fair price shops ( under National Food Security Act)
• Prime Minister Kisan Samman Yojana (PM-KISAN)

Arguments in favour

• Social investment: Aid to the poor is seen as a wasteful expenditure. But low interest rates for corporates to get cheap loans or the ‘sop’ of cutting corporate taxes are never criticized.
• Socialistic policy: This attitude comes from decades of operating within the dominant discourse of market capitalism.
• Election manifesto: Proponents of such policies would argue that poll promises are essential for voters to know what the party would do if it comes to power and have the chance to weigh options.
• Welfare: Economists opine that as long as any State has the capacity and ability to finance freebies then its fine; if not then freebies are the burden on economy.
• Other wasteful expenditure: When the Centre gives incentives like free land to big companies and announce multi-year tax holidays, questions are not asked as to where the money will come from.

A rational analysis of freebies

• Winning election and good governance are two different things. The role of freebies to avail good governance is definitely questionable.
• The social, political and economic consequences of freebies are very short-lived in nature.
• There are many freebies and subsidies schemes available in many States but we still find starvation deaths, lack of electricity, poor education and health service.
• Hence the sorrow of the masses of India cannot be solved by freebies or by incentives.

So are not freebies meant only to attract voters and swing voters by concentrating on a preferential group or community?

Way forward

• It can be agreed that democracy requires popular support for its rule to continue. The sops and freebies to the poor buy it the requisite votes.
• But the democratic process of election and election promises should be clear. It should not control voters thought.
• What some people term as ‘populism’ actually constitutes what real economics should be.
• If you deprive people of what they really need, you will have to throw allurements at them.
• This can only be stopped if political masters try to follow what economist EA Schumacher had conveyed through his seminal work Small is beautiful – “Treat economics as if people matter.”

 

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The issue of holding simultaneous Lok Sabha and Assembly elections had been referred to the Law Commission for a practicable road map and a framework can be worked out, the Union Law Minister informed the Lok Sabha.

What are simultaneous polls?

• Currently, elections to the state assemblies and the Lok Sabha are held separately — that is whenever the incumbent government’s five-year term ends or whenever it is dissolved due to various reasons.
• This applies to both the state legislatures and the Lok Sabha. The terms of Legislative Assemblies and the Lok Sabha may not synchronize with one another.
• For instance, Rajasthan faced elections in late 2018, whereas Tamil Nadu will go to elections only in 2021.
• But the idea of “One Nation, One Election” envisages a system where elections to all states and the Lok Sabha will have to be held simultaneously.

Simultaneous polls in India

• India had concurrent elections for the first two decades.
• Starting from the first general elections of free India in 1951 and the next three cycles of elections, the country witnessed concurrent Lok Sabha and Assembly elections.
• Exceptions to these were a few states like Kerala where a mid-term election was held in 1960 on the premature dissolution of the Assembly.
• In Nagaland and Pondicherry where the Legislative Assembly was created only after the 1962 general elections.

End of the era

• The fourth Lok Sabha constituted in 1967 was dissolved prematurely in 1971 ahead of its normal term resulting in a mid-term Lok Sabha election.
• This was the beginning of the end of simultaneous elections in India.
• Extension of the term of Lok Sabha during the National Emergency declared in 1975 and the dissolution of Assemblies of some States after the 1977 Lok Sabha election further disturbed this cycle.
• Currently, there are at least two rounds of Assembly general elections every year.

Making simultaneous elections a reality

• Sections 14 and 15 of the Representation of the People Act, 1951, empower the Election Commission to notify elections any time during the last six months of the term of the House and not earlier than that.
• Therefore, if the terms of the Houses are expiring within a window of three to four months, it would be legally possible to hold elections simultaneously to constitute the new Houses.
• In other words, to contemplate simultaneous elections, we need, as a starting point, a situation where the Lok Sabha and the Legislative Assemblies of all States and UTs have their terms ending together.

Synchronizing the terms of the Houses

• Both the Lok Sabha and Legislative Assemblies (ordinarily) have a term of five years.
• Article 83 of the Constitution provides for the tenure of Lok Sabha. Identical provisions are present in Article 172(1) regarding the term of the Legislative Assemblies.

There is no duplication of work in preparing the electoral rolls for the two elections and hence no extra labor or expenditure is involved on this count.

What is required?

• This necessarily calls for either extending the terms of several of the Houses or curtailing of terms or a combination of both, that too by two to three years in some cases.
• For enabling such curtailing or extension of the term, the relevant Articles of the Constitution mentioned above will have to be suitably amended.

Why Simultaneous Elections?

Two seemingly relevant factors in favor of simultaneous elections, as opposed to separate elections, are:

1. Effort saving: Simultaneous elections reduce labour, time and expenditure in the conduct of elections; and
2. Instances of pause in governance are addressed if elections are conducted in one go instead of staggered elections.

[1] How is effort saving possible?

• Electoral roll: Polling stations for Lok Sabha and Legislative Assembly elections are the same. So is the electoral roll.
• Labour: There is no duplication of work in preparing the electoral rolls for the two elections and hence no extra labour or expenditure is involved on this count.
• Logistics: In the conduct of elections, all logistic arrangements are replicated for the two elections when the same drill can cater to both the elections if held together.
• Security: This will also mean saving in terms of human resources. Another area of saving in simultaneous elections would be in the deployment of the Central Police Force.

[2] Governance pause can be avoided

• Instances of pause in governance is due to the Model Code of Conduct (MCC).
• MCC is a set of behavior guidelines for candidates and political parties that comes into operation from the date election is announced by the Election Commission.
• A crucial part of the MCC is the restrictions on the party in power.  If all elections are held together, the restrictions under MCC will be through in one go.

[3] Help reduce campaign expenses

• Simultaneous elections can bring considerable savings in the election propaganda campaign expenditure for the political parties.
• Given that political funding is a major factor in the increasing menace of corruption, the move to reduce campaign expenditure is a welcome initiative.

[4] Voter turnout

• A nationwide election could push up the voter turnout since a once-in-five-years event is bound to attract more enthusiastic participation across all sections.
• Frequent elections can bring in the election-fatigue factor at least among some sections of electors.
• The simultaneous elections help address the fatigue element and the usually observed urban apathy in voting. Better electors’ participation will further add to the credibility of the election.

Exceptions to this debate: Local Bodies’ Elections

• The local bodies’ elections have not been considered for the analysis here.
• This is for the reason that the elections to local bodies cannot be clubbed with the proposed simultaneous elections for the Lok Sabha.

Why?

• The elections to local bodies are conducted under the superintendence, direction, and control of a different constitutional authority, namely, the respective State Election Commission.
• Holding local bodies’ elections along with the other elections will require the team of the same polling officials to report to and take instructions from two different authorities simultaneously.
• There is a distinct set of polling stations too for local bodies’ elections.
• Further, the litigation forum before which these elections can be challenged is different.

Challenges in ensuring simultaneous elections in India:

[1] Synchronizing the Houses

• Bringing the terms of all the Houses to sync with one another necessarily calls for either extending the terms of several of the Houses or curtailing of terms or a combination of both.
• This may be by two to three years in some cases.
• For this, relevant Articles of the Constitution will have to be suitably amended.

[2] Midterm dissolution cannot be controlled

• Even if the terms of the Houses are in sync as a one-time measure, we will still need an adequate legal safeguard in place to avoid mid-term dissolution and protect the simultaneous elections cycle.
• This can be a tough task in conventionally fragile states with smaller assemblies with coalitions.

[3] EVM related expenses

• One aspect that could offset the savings would be the doubling of expenses on electronic voting machines (EVMs).
• Considering that the incidental recurring expense in the storage and security of the EVMs will also be a considerable amount.
• The overall expenditure in holding elections may not see any substantial dip on account of simultaneous elections.

Arguments against the idea

• National and state issues are different, and holding simultaneous elections is likely to affect the judgment of voters.
• Since elections will be held once in five years, it will reduce the government’s accountability to the people. Repeated elections keep legislators on their toes and increase accountability.
• When an election in a State is postponed until the synchronized phase, President’s rule will have to be imposed in the interim period in that state.
• This will be a blow to democracy and federalism.

Way forward

• We need an adequate legal safeguarding place to avoid mid-term dissolution and protect the simultaneous elections cycle.
• For maintaining the electoral cycle, some countries have legal provisions to the effect that for a ‘no-confidence motion’.
• Their proposed resolution also contains a constructive ‘vote of confidence in an alternative government to continue with the tenure.

 

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