| 20 |
Are there regulations governing political financing? |
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20a:
In law, there are regulations governing private contributions to political parties.
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YES |
NO |
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Comments: There are regulations in place. The flip side is that they are hopelessly inadequate.
References: www.eci.gov.in
Peer Review Comments: Private contributions to political parties are allowed. As of now, there are no laws regulating them.
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20b:
In law, there are limits on individual donations to candidates and political parties.
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| Score: |
YES |
NO |
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Comments: There are limits, but most donations are made without receipts being issued. This has been a major area of concern and also controversy.
References: Companies Act www.eci.gov.in
Peer Review Comments: Most of the time a donation is taken in the form of cash that comes from the parallel economy.
Peer Review Comments: The law's ambit is only in the context of elections. Otherwise, there are no regulations governing contributions.
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20c:
In law, there are limits on corporate donations to candidates and political parties.
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| Score: |
YES |
NO |
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Comments: Section 293 of the Companies Act of 1956 states that donations can be made by corporations to political parties, but they cannot exceed 50,000 rupees (US$1,272) or 5 percent of the average net profit determined under specific provisions of the Companies Act for the three immediately preceding financial years. Such contributions need to be backed by a resolution of the board of directors of the company.
References: Companies Act
Peer Review Comments: My earlier observation applies. Context is important: The law's ambit is only in the context of elections. Otherwise, there are no regulations governing contributions.
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20d:
In law, there are limits on total political party expenditures.
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| Score: |
YES |
NO |
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Comments: There are no limits on how much a party can spend. Limits are prescribed on how much an individual candidate can spend for his/her election campaign, but there are no limits prescribed for party expenditure.
References: Election Commission Web site: www.eci.gov.in
Peer Review Comments: This in some sense also answers the earlier two questions: The law's ambit is only in the context of elections. Otherwise, there are no regulations governing contributions.
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20e:
In law, there are requirements for disclosure of donations to political candidates and parties.
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| Score: |
YES |
NO |
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Comments: There is no law requiring mandatory disclosure of donations made to political candidates or parties.
References: Election commission reports: www.eci.gov.in
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20f:
In law, there are requirements for the independent auditing of the finances of political parties and candidates.
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| Score: |
YES |
NO |
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Comments: This occurs only in the case of candidates. The Election Commission monitors the expenditure of candidates and limits are fixed as to how much a candidate can spend. Candidates are required to submit an account of expenditure once the elections are completed. There is very little verification of the authenticity of what is submitted. There is no restriction on how much a party can spend. Thus, the restriction of an individual candidate expenditure is hardly of any significance, as there is no cap on party expenses.
References: www.eci.gov.in
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20g:
In law, there is an agency or entity that monitors the political financing process.
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| Score: |
YES |
NO |
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Comments: The Election Commission of India oversees whether candidates remain within the limits of expenditure prescribed. They appoint expenditure observers for each electoral district who monitor the election related expenditure of individual candidates. However, there is very little public information or debate on the matching of the expenditure statements submitted by candidates and those recorded by the observers. This is partly linked to the fact that there is no cap on the expenses that a party can incur on its candidates. There has been some effort at the level of local elections by the authorities to compute the party expenses on individual candidates, but it has had limited success.
References: The Election Commission of India
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| 21 |
Are the regulations governing political financing effective? |
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21a:
In practice, the limits on individual donations to candidates and political parties are effective in regulating an individual's ability to financially support a candidate or political party.
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| Score: |
100 |
75 |
50 |
25 |
0 |
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Comments: Increasingly, donations to parties are unaccounted for. Parties maintain minimal records of their financial transactions and most transactions are done through cash with hardly any formal records maintained. This has encouraged the growth of a parallel economy. Further, a large number of investigative reports by the electronic media have highlighted the fact that serious cases of financial irregularities indulged in by elected representatives are linked to their need for funds to carry forward their campaigns. The scam involving members of Parliament selling the questions that they are allowed to ask is a case in point.
References: Scames unearthed by televisions channels: www.ibnlive.com; www.ndtv.com
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21b:
In practice, the limits on corporate donations to candidates and political parties are effective in regulating a company's ability to financially support a candidate or political party.
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| Score: |
100 |
75 |
50 |
25 |
0 |
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Comments: Increasingly, donations to parties are unaccounted for. Parties maintain minimal records of their financial transactions and most transactions are done through cash, with hardly any formal records maintained. This has encouraged the growth of a parallel economy.
References: www.hinduonline.com;
www.timesofindia.com
Peer Review Comments: The question lacks clarity. The notion of companies and corporations is somewhat new to India.
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21c:
In practice, the limits on total party expenditures are effective in regulating a political party's ability to fund campaigns or politically-related activities.
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| Score: |
100 |
75 |
50 |
25 |
0 |
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Comments: There are no limits on party expenditures.
References: In the absence of a law to regulate party expenses, there is no writing on effectiveness or otherwise.
Peer Review Comments: There are no legal limits on party expenditure.
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21d:
In practice, when necessary, an agency or entity monitoring political financing independently initiates investigations.
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| Score: |
100 |
75 |
50 |
25 |
0 |
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Comments: The only level of monitoring that is required is the monitoring of individual candidates expenses. Candidates are required to submit details of expenses. These are routinely submitted. There is limited opportunity to verify their authenticity. It is an open secret that most candidates spend well above the prescribed limits. A study done by Lokniti around the time of the 1999 Elections, which was sponsored by the Election Commission, shows that limits of expenses are very rarely adhered to. News reports too vouchsafe the fact that limits to expenditure by individual candidates are never adhered to.
References: www.lokniti.org
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21e:
In practice, when necessary, an agency or entity monitoring political financing imposes penalties on offenders.
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| Score: |
100 |
75 |
50 |
25 |
0 |
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Comments: It is only individual candidates who can be penalised if it can be proved that their expenses have crossed the prescribed limits. Most candidates are able to circumevent the provision by claiming that any visible, documented excess expenditure has been incurred by the political party, and there are no limits on what the party can spend.
References: ECI reports: www.eci.nic.in
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21f:
In practice, contributions to political parties and candidates are audited.
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| Score: |
100 |
75 |
50 |
25 |
0 |
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Comments: There is little scope for auditing.
References: www.eci.gov.in
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| 22 |
Can citizens access records related to political financing? |
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22a:
In practice, political parties and candidates disclose data relating to financial support and expenditures within a reasonable time period.
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| Score: |
100 |
75 |
50 |
25 |
0 |
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Comments: It is mandatory for candidates to file their expenditures. More often than not these statements do not reflect the reality of expenditures. In the case of political parties, there is no mandatory requirement for the party to submit a statement of accounts relating to expenditures.
References: www.eci.gov.in
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22b:
In practice, citizens can access the financial records of political parties and candidates within a reasonable time period.
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| Score: |
100 |
75 |
50 |
25 |
0 |
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Comments: Citizens can access the financial statements filed by candidates regarding their expenditures. These are now increasingly being placed on the Web. However, the extent to which these statements reflect the reality of expenditures is debatable.
References: www.lokniti.org;
www.eci.gov.in
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22c:
In practice, citizens can access the financial records of political parties and candidates at a reasonable cost.
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| Score: |
100 |
75 |
50 |
25 |
0 |
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Comments: Citizens can access the financial statements filed by candidates regarding their expenditures. These are now increasingly being placed on the Web. However, the extent to which these statements reflect the reality of expenditures is debatable.
References: www.janaagraha.com;
www.lokniti.org;
www.eci.gov.in
Peer Review Comments: What is the definition of reasonable?
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Global Integrity uses a