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The Big Picture – Party funding: Do parties get clean funds?


The electioneering to the Delhi assembly is reaching its peak. As all the parties are out to woo their voters with all that they have, the AAP has been accused of receiving tainted funds. It is also been accused of converting black money into white. With AAP defending itself and seeking a larger probe into the funding of all parties, the question of political funding is back on focus. There has been debate about making political funding in the country more transparent. However it has resulted only in partial transparency.

This is something which the election commission has been demanding. The returns which the political parties submit to the commission are about the total money that they have received but parties do not provide the break up details.

Election commission has three demands pending for the last 20 years. They are:

  • The funds of the political party should be audited by an independent auditor.
  • The responsibility should not be given to the inside auditor.
  • The details should be placed in public domain.

In October 2014, when election commission came out with a set of guidelines on ensuring transparency in electoral funds, political parties opposed the Election Commission (EC) guidelines and sought their rollback calling them legally “untenable” and “vague”.

The Election Commission had implemented these guidelines, called Transparency and Accountability in Party Funds and Election Expenditure and had stipulated a slew of measures. These norms aim to end opaqueness in the process of getting donations and funds by political parties in their coffers and those given to candidates.

The new guidelines include:

  • It was made mandatory for political parties to deposit their funds in banks and not to exceed ceiling limits in financial assistance for candidates.
  • The treasurer of a political party is required to ensure maintenance of accounts at all state and lower levels and consolidated accounts at the central party headquarters.
  • The annual accounts shall be audited and certified by certified chartered accountants as required under the Income Tax Act.
  • The party should also ensure that no payment in excess of Rs. 20,000 is made to any person or company in cash, except in a village or in town, not served by a bank.

These orders were issued under Article 324 of the Constitution (superintendence, direction and control of elections) as part of a set of comprehensive guidelines on transparency and accountability in party funds and election expenditure.