Black Money – Domestic and International Efforts

[op-ed snap] How to curb ‘invisible money’

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Mains Paper 2: Polity | Statutory, regulatory and various quasi-judicial bodies.

Q.)  “The power to frame rules under the Representation of People Act, 1951 has not been given to the EC by successive governments.” Examine Critically.

From the UPSC perspective, the following things are important:

Prelims level: Particulars of the RP Act,  Law commission, Election Commission

Mains level: The article gives important facts on the reasons behind increasing invisible money in Elections.



  1. The article is regarding the reforms suggested by Election and Law Commission, and Government’s non-compliance on them
  2. This non-compliance is increasing Invisible money in Elections

Power given to EC, under the RP Act

  1. The Election Commission (EC) works in accordance with
    (1) Article 324
    of the Constitution of India,
    (2) the Representation of the People Act (RP Act), 1951
    (3) the rules framed by the government thereunder, and various judgments of the Supreme Court and High Courts
  2. The power to frame rules under the RP Act has not been given to the EC by successive governments

Status of reforms suggested by the EC

  1. E.C sent 22 proposals in 2004
  2. In December 2016, it sent 47 proposals including those for “Election expenses and election petitions”, “Election campaign and advertisements”, and “Reforms relating to political parties”
  3. There are also instances where the Supreme Court has directed reforms in its decisions, but parliament made laws to prevent implications of the judgments
  4. Most of the reform proposals by the EC have not been acted upon

Two proposals by the government in this budget which increase invisible money in Election

(a) to remove the limit of 7.5% on profits that a company can donate to a political party, and
(b) to remove the requirement that the company making a donation to a political party disclose the name of the party and the amount donated

Suggestions by the Law commission

  1. A logical and simple way of introducing financial transparency and accountability in the working of the political parties is recommended by the Law Commission
  2. Suggestion: is to bring political parties under the Right to Information (RTI) Act, 2005
  3. The Central Information Commission (CIC) had also said in a full bench decision in June 2013 that six national political parties were indeed ‘public authorities’ under the RTI Act
  4. Why: Because they fulfilled all conditions specified in Section 2(h) of the RTI Act which defines ‘public authority’
  5. Reaction from Political Parties: Despite this decision, political parties, including the ruling party now, refused to accept RTI applications
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