Spend and tell

Purging political parties and elections of illegitimate money is an idea with broad appeal in India,its need publicly acknowledged by most political parties. It is also easier said than done,as democracies around the world have discovered,as they search for ways to clean elections and curtail influence and favour-mongering. Now,the Election Commission has asked political parties to maintain audited accounts,to be produced within six months of the close of the financial year.

There have been earlier moves to make election funding more transparent. In 2003, the Election and Other Related Laws (Amendment) Act introduced tax deductibility for political donations,if receipts were provided. Amounts over Rs 20,000 are supposed to be disclosed by parties on the EC website. Political parties are tax exempt,but are expected to file tax returns — though in practice their declared income is drastically understated. Partly,the opacity and rule-bending in India stems from the fact that the rules are so difficult. Election spending caps are unrealistically low,and apply only to candidates (exempting parties and supporters). Undisclosed expenditure by parties is still the norm,despite steadily increasing reporting requirements. Now,parties will be asked to keep accounts on an accrual system (as transactions occur),and rotate their auditors at least every three years. Various measures have been taken up to bring more transparency — for instance,the mandatory filing of affidavits of a candidate’s assets and liabilities. And while these moves towards greater disclosure are a more sensible way to achieve the EC’s ends than,say,capping donations,we need more reform to reach a tipping point. Public funding of elections has been discussed widely,if desultorily — its viability in our democracy is still to be assessed,but some measure of state subsidy can also be used to extract better intra-party governance and transparency. There should also be a move to structure private fund-raising in a way that inc-entivises many more small donors.

Any move to make party accounts more transparent must be applauded,as a stab in the right direction. Competitive and avid resource-generating by parties is at the heart of many of our high-profile cases of corruption — and this accounting exercise,even if it only skims the surface of a party’s real stash,could be valuable if it’s a foreshadowing of greater reform.