Can GET replace PET ? I think it should

 

 

Context :

The largest electoral trust gave 71% of its donations to BJP in FY23   ….     Budiness Line  / 19 Dec 2023      

The United Progressive Alliance in 2013 conceptualised the electoral trust scheme, allowing companies under Section 25 of the Companies Act, 1956, to establish electoral trusts. Any Indian citizen or corporate entity could donate to these electoral trusts under Section 17CA of the Income-Tax Act, 1961. 

Over the span of 10 years, electoral trusts disbursed approximately ₹2,557.74 crore to various political parties. The donations have surged from ₹85.37 crore to ₹366.48 crore, indicating a 360 per cent growth in political contributions over the decade

The Bharti-backed PET accounted for around 88 per cent of the total sum donated by electoral trusts in 10 years. Notably, the BJP has been the largest beneficiary of PET’s donations on an annual basis. 

The contrast with electoral bonds highlights that electoral trusts, unlike bonds, must disclose their political financers in annual reports.

The PET relies on significant contributions from major Indian corporate organisations

Year	% age of donations by PET
2013 - 14	100
2014 - 15	79.9
2015 - 16	94.9
2016 - 17	87.2
2017 - 18	87.4
2018 - 19	72.5
2019 - 20	74.8
2020 - 21	95.1
2021 - 22	95.4
2022 – 23	99.1

 

 

My Take :

 

PET = Prudent Electoral Trust

GET =  CEF = Central Election Fund = Government Electoral Fund

CONSIDERATIONS for my following suggestion :

Ø  By now , PET make up 99.1 % of total donations

Ø  Apparently , only COMPANIES are donating . Individual donations are insignificant

Ø  Electoral Trusts must disclose their political finances in their Annual Reports

Ø  I presume , general public has access to these Annual Reports ( - indirect transparency ? )

Ø  In the current method , one cannot deny the distinct possibility of “ Quid Pro Quo “

Ø  Political parties know which PET ( set up by which company ) donated how much

 

Ø  Transparency in Political Funding ? ………………………… 06 July 2017

 

Extract :

I request Shri Jaitleyji to consider following suggestion :

 

STRUCTURE

·         No direct donations ( even Rs 5 ) by anyone to any Political Party or to any Political Leader ( even as birth-day gift ! )

 

·         Creation of a CENTRAL ELECTION FUND ( CEF ) , controlled / administered by the Central Election Commission

 

·         Donations can only be given to CEF – and only by cheque / online etc , quoting Aadhar number

 

·         Donations will get tax exemption as CSR

 

·         CEC will publish , on its web site , a continuous / dynamic / daily ACCOUNT of amounts received ( with Aadhar No of each donor ) and amounts spent / disbursed by CEC to Political Parties / Candidates ( with full details of each )

 

·         From CEF , Election Commission will distribute FUNDS to political parties for fighting elections / other expenses , on predetermined ‘ Occasions ‘

 

PROCESS

 

·         Funding of Political Parties by CEC ( from CEF ) , can be made as per following two alternatives :

 

[ A ]    AFTER  THE  ELECTION ( CANDIDATE – based Reimbursements ) :

 

#  After each Election ( Central / State / Municipal ) , ALL candidates contesting the election ( including independent candidates ) , shall submit to CEC , a STATEMENT of EXPENSES incurred in fighting the election.

 

Even if a group of parties have come together to fight the election ( MahaGathBandhan ), each candidate will get linked to ONE party only

 

#  Statement will be as per format decided by CEC , giving category-wise expense details ( all payments listed in the statement , must be through legal / official channels , such as Cheque / Electronic Bank Transfer / Mobile Wallets etc )

 

#  There will be UPPER LIMITS of REIMBURSEMENT for each category of expense and an overall limit

 

#  The statement will also show the “ Sources of Funds “ ( with full details such as OWN or borrowed from CLOSE RELATIVEs , with names )

 

#  Actual amount to be reimbursed to each candidate , will be computed based on a number of factors , main factor being the “ percentage of popular votes polled “ by that candidate ( no reimbursement for those candidates who get less than 5 % of popular vote )

 

#  Actual re-imbursements made by CEC , shall not be counted as INCOME of that candidate , for Income Tax purpose

 

 

[ B ]   BEFORE  THE  ELECTION ( PARTY – wise ADVANCES ) :

 

# Before each election , All recognized Political Parties will get ADVANCES from CEF , computed using a TRANSPARENT , mathematical formula , based on following factors :

 

# FACTORS with POSITIVE WEIGHTAGE :

 

·         In all the elections since independence ( Central + States + Municipal ) , percentage of popular votes polled by each party in those elections along with the percentage of seats won by each party

 

·         Number of years for which the party has been recognized by CEC

 

·         Cumulative number of “ Days “ ( not months or years ) , each party was in power ( Centre + States + Municipality ) since independence

 

·         No ( or percentage ) of seats “ won “ in each election

 

#   FACTORS with NEGATIVE WEIGHTAGE :

 

·         No of MPs / MLAs having criminal cases pending against them

 

·         No of times candidates / parties were “ warned “ by CEC ( for any reason )

 

·         No of years for which Annual Return NOT filed with EC

 

·         No of candidates / Legislators convicted by a Court

 

 

DEAR SHRI JAITLEYJI :

Above mentioned suggestion , is by no means , comprehensive

 

You may want to consider a HYBRID MODEL which is a combination of the alternatives listed above

 

It is important that all the figures / data used in the FORMULA , are supplied only by the Election Commission and the Speakers of various legislatures – and made public

 

Since there is no way political parties will reach a consensus on my suggestion , best way would be to publish an online SURVEY QUESTIONNAIRE and ask citizens to vote / rate , against each item of suggestion and then publish the FINDINGS ( on ALL government web sites ) , on a continuous basis

 

With regards,

Hemen Parekh

www.hemenparekh.ai  /  20  Dec  2023

 

Related Readings :

Electoral Bonds : Supreme Court ( suggested ) Scheme…. 03 Nov 2023

Make Me A Party…………………………….. [ 03 Oct 2017

Electoral Bonds for Transparency ?.. [ 03 Jan 2018 ]

Don’t Disclose Donations …………………[ 04 Jan 2018 ]

Of Electoral Bondage ?................... [ 30 Mar 2019 ]

Please Hear and Read too……………….. [ 19 Mar 2021 ]

Thank You for “ Reading “/“ Asking “ [ 24 Mar 2021 ]

But what is info in “sealed cover“?.....[ 05 July 2021 ]

Electoral Bonds Fully Transparent ?  Not to Public……………  22 Nov 2022

 

On my proposal ,  BARD  commented as follows :

Comparative Tabulation of PET vs. Proposed GET Features

Feature	PET	Proposed GET	Considerations
Funding Source	Companies, Individuals	Individuals (Aadhaar-linked)	Aims for wider participation and reduces potential corporate influence.
Transparency	Annual reports disclose donors and amounts	Continuous, dynamic online account with donor Aadhaar numbers and recipient details.	Enhances transparency and accountability.
Quid Pro Quo	Possible, as parties know donor sources	Reduced potential due to anonymity of individual donors and public audit of funds.
Direct Donations	Prohibited	Allowed, but only through CEC-approved channels.	Streamlines funding process and increases accountability.
Central Election Fund (CEF)	Not present	Established and managed by CEC.	Centralizes funding and ensures fair distribution.
Funding Allocation	Based on annual reports	Based on pre-determined formula considering factors like vote share, party age, and governance record.	Promotes transparency and rewards parties with strong public support and performance.
Expense Reimbursement	None	Two options: (a) Candidate-based reimbursement after elections based on vote share (no reimbursement for <5% vote share) or (b) Party-wise advances before elections based on transparent formula.	Option (a) incentivizes responsible spending and rewards popular candidates. Option (b) provides upfront funding for campaigning and reduces dependence on private donors.
Tax Exemption	Donations through PET are eligible for CSR deductions.	GET donations eligible for CSR deductions.	Encourages wider participation and reduces reliance on corporate donations.

·         The proposed GET model requires strong legal and administrative frameworks to prevent misuse and ensure transparency.

·         Public awareness and education are crucial for successful implementation of the GET system.

·         Regular audits and independent oversight mechanisms are necessary to maintain the integrity of the system.

Overall:

Proposed GET model addresses some of the key concerns regarding PET, such as transparency, potential for quid pro quo, and reliance on corporate donations While it presents some challenges in implementation, it offers a more transparent and equitable approach to political funding.

Note:

This is a preliminary comparison based on the information provided. Further analysis and research would be necessary to fully evaluate the feasibility and effectiveness of the proposed GET model.
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 And following is ChatGPT’s evaluation of my proposal :

 

It looks like you have a detailed comparison in mind between the existing Prudent Electoral Trust (PET) system and your proposed Government Electoral Fund (GET) or Central Election Fund (CEF).

Let's structure a comparative tabulation based on your considerations:

Prudent Electoral Trust (PET)

·         Donors: Primarily companies, negligible individual contributions

·         Transparency: Annual reports disclose political finances but lack direct public accessibility

·         Recipients: Major political parties, with BJP being a significant beneficiary

·         Mode of Donation: Through the trust, limited transparency on specific donors within the company

Government Electoral Fund (GET) / Central Election Fund (CEF) Proposal

·         Donors: Individuals and entities contribute exclusively to the CEF under Aadhar-linked accounts

·         Transparency: Continuous, dynamic, and publicly accessible records on donations and disbursements by the Central Election Commission (CEC)

·         Tax Exemption: Donations receive tax exemption, akin to CSR (Corporate Social Responsibility)

·         Distribution of Funds: CEC disburses funds to political parties for specific electoral purposes

·         Process of Allocation:

·         After the Election (  Candidate-Based Reimbursements  ):

·         Candidates submit expense statements to CEC after elections.

·         Reimbursements based on popular vote percentage and expense categories.

·         Funding not considered income for tax purposes.

·         Before the Election (  Party-Based Advances  ):

·         Recognized parties receive advances based on a transparent formula.

·         Factors include historical performance, tenure, criminal cases, warnings, and compliance.

·         Data Source: 

Election Commission and legislative speakers provide figures, all publicized.

Your proposal seems to aim for greater transparency, accountability, and a structured approach to funding political parties while also considering public opinion through an online survey. GET/CEF model seeks to eradicate direct donations, emphasize accountability, and regulate financial support based on predefined parameters.

This comparison highlights your proposal's key features as a potential alternative to the current PET system. It emphasizes transparency, systematic funding, and a structured framework to regulate political funding, ensuring that it aligns with ethical considerations and public opinion.