Skip to main content

Electoral bonds: Dubious shell companies would divert black money to political parties, ECI warned GoI a year ago

Arun Jaitley
By Our Representative
A Right to Information (RTI) reply has revealed that the Election Commission of India (ECI) had warned the Ministry of Law and Justice, Government of India (GoI), way back in May 2017 that the electoral bond system, introduced by Finance Minister Arun Jaitley in February 2017, for donations to political parties would open floodgates for dubious shell companies mushrooming across India to redirect black money into political parties' coffers.
In its reply dated May 2, 2018 to a plea by a Pune citizen, Vihar Durve, the ECI had sent across a letter, signed by ECI director Vikram Batra, which revealed ECI's strong reservation over an amendment to the Companies Act, 2013, which seeks to remove the provision of the "limit of 7.5% of the average net profits in the preceding three financial years on contributions by companies".
"This", according to Batra's letter, "Opens up the possibility of shell companies being set up for the sole purpose of making donations to political parties, with no other business of consequence having disbursable profits." The letter added, the ECI believed "that the abolition of the relevant provision would lead to increased use of black money for political funding through shell companies."
The letter added, "The Commission is of the view that the earlier provisions ensured that only profitable companies with a proven track record could provide donations to political panics and, accordingly, it is recommended that this provision may be reintroduced."
Batra's letter, which drew attention to the Finance Act 2017, which had introduced amendments in the income Tax Act, the Representation of the People Act, 1951, and the Companies Act, 2013, said, all of it together would have "serious impact on transparency aspect of political finance/funding of political parties."
The letter said, the amendment in the Representation of People (RP) Act, I951, kept "any donation received by a political party ... out of the ambit of reporting under the Contribution Report as prescribed under the Act, calling it "a retrograde step as far as transparency of donations is concerned", insisting, "this proviso needs to be withdrawn."
The letter underlined, "In a situation where contributions received through electoral bonds are not reported, on perusal of the Contribution reports of the political parties, it cannot be ascertained whether the political party has taken any donation in violation of provisions under Section 29B of the RP Act, l951, which prohibits the political parties from taking donations from government companies and foreign sources."
Also referring to the amendment to Income Tax Act, whereby, "no donation exceeding Rs 2,000 can be received by a political party otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account or through electoral bond", the letter said, ironically, the limit for receipt of anonymous donations by political parties still remained at Rs 20, 000 under the RP Act, I951.
Pointing out that "the RP Act needs to be amended to reduce the limit of anonymous/cash donations to Rs 2,000 so as to bring these two Acts in consonance with each other", the letter also took objection to a second amendment to the Companies Act, which abolished the provision that firms must declare their political contributions in their profit and loss statements.
It said, "This requirement is now reduced to only showing a total amount under this head, which again, would compromise transparency", wanting the amendment be dropped.

Comments

Uma said…
This government has been promising to unearth all black money and legalise it and we are supposed to believe them. They are just making fools of us: first it was by demonetising one-thousand rupee notes and bringing in two-thousand rupee notes--no one knows how that helped but there is no end to the black money still around; and now with these Electoral Bonds, they have found another way of encouraging black money--who do they think they are fooling? In both instances, they have made sure that their friends and supporters can get away with their hordes of black money

TRENDING

India's GDP down by 50%, not 23%, job loss 200 million not 122 million: Top economist

By Our Representative One of India’s topmost economists has estimated that India’s Gross Domestic Product (GDP) decline was around 50%, and not 23%, as claimed by the Government of India’s top data body, National Statistical Organization (NSO). Prof Arun Kumar, who is Malcolm S Adiseshiah chair professor, Institute of Social Sciences, New Delhi, said this was delivering a web policy speech, organised by the Impact and Policy Research Institute (IMPRI), New Delhi.

JP advised RSS to give up Hindu Rashtra, disband itself: Ex-IAS officer tells Modi

Counterview Desk
Major MG Devasahayam IAS (Retd), chairman, People-First, in an open letter to Prime Minister Narendra Modi on the occasion of Jayprakash Narain’s (JP’s) death anniversary (October 11) has wondered whether he remembers “a patriot called Jayaprakash Narayan”. Recalling what JP thought on issues such as communalism, freedom, democracy, Hindutva etc., Devasahayam says, Modi has been been doing “the very opposite of the principles and values for which JP lived and died.”

Buddhist shrines massively destroyed by Brahmanical rulers in "pre-Islamic" era: Historian DN Jha's survey

By Our Representative
Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book, "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

UP chief secretary, DGP have 'surrendered' to political diktat: 92 retired IAS, IPS officials

Counterview Desk
In an open letter to Uttar Pradesh chief minister Yogi Adityanath, 92 retired IAS, IFS and IPS bureaucrats, commenting on “blatant violations of the rule law” following the Hathras incident, have blamed that the Chief Secretary and the Director General of Police for abjectly failing to exercise control over a “highly compromised” administration the state.

Hathras reflects Manu's mindset dominates: 'Women are false, it's in their nature to seduce'

By Parijat Ghosh, Dibyendu Chaudhuri*
The woman died and then we woke up to protest. She was alive for two weeks after the heinous incident. Many of us even didn’t notice what had happened at Hathras, how she fought during the next 15 days. Those who noticed, many of them were not sure what actually had happened. So much so, we as a nation were more busy in finding out who among the Bollywood actresses were taking drugs, who smoked weed, who had ‘inappropriate’ or more than one relationship, what kind of private conversations they had in their chat boxes and what not!

Swami Vivekananda's views on caste and sexuality were 'painfully' regressive

By Bhaskar Sur*
Swami Vivekananda now belongs more to the modern Hindu mythology than reality. It makes a daunting job to discover the real human being who knew unemployment, humiliation of losing a teaching job for 'incompetence', longed in vain for the bliss of a happy conjugal life only to suffer the consequent frustration.

Delhi riots: Even British didn't accuse Bhagat Singh of reading Lenin, Jack London

By Vikash Narain Rai*
After the #BlackLifeMatters movement seriously tested the credibility of police across America, the Houston police chief Art Acevado talked of ending “lawful but awful” policing. No comparison, but in India, a citizens’ committee comprising former top judges and bureaucrats is now set to inquire into the role of the state machinery and media in handling the February 2020 Delhi violence, which followed protests against the Citizenship Amendment Act (CAA), “as the investigation by the Delhi Police has evoked extensive critical commentary in recent times.”

Degrading conditions amidst Covid-19: Toxic ship at Alang, Gujarat, 'endangers' migrants

Counterview Desk
Evironmental activist Dr Gopal Krishna, who edits the ToxicsWatch journal, in an open letter to the chairman, Ship Breaking Scrap Committee, Union Ministry of Shipping, with copies to the joint secretary, Union Ministry of Shipping and other Government of India ministries* has said that there exists “threat to Indian maritime environment and security from viral diseases like Covid-19 from ballast water and toxic substances.”

Human rights 'abuses': Funding to India should be vetted, Greens tell Australian govt

Counterview Desk
A roundtable organised by Australian Greens, which is the third biggest political group in the country, held to discuss human rights situation in India at the New South Wales Parliament in Sydney has insisted that parliamentarians, human rights activists and lawyers should play a more active role “standing up for human rights not just in their own places but also in India.”