Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do.

There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Sunday, 18 December 2016

How Will Political Parties Survive ?

Yesterday's Indian Express carried following news report :

Election Commission seeks ban on anonymous contributions to parties above Rs 2000

" Seeking to stem the flow of black money in polls, the Election Commission has urged the government to amend laws to ban anonymous contributions of Rs 2000 and above made to political parties. There is no constitutional or statutory prohibition on receipt of anonymous donations by political parties. But there is an “indirect partial ban” on anonymous donations through the requirement of declaration of donations under section 29C of The Representation of the People Act, 1951.

But, such declarations are mandated only for contributions above Rs 20,000.

As per the proposed amendment, sent by the Commission to the government, and made part of its compendium on proposed electoral reforms, “ anonymous contributions above or equal to the amount of Rs two thousand should be prohibited. ”

The Commission has also proposed that exemption of Income Tax should only be extended to political parties that contest elections and win seats in Lok Sabha or assembly polls.

The Commission said, “ There could be cases where political parties could be formed merely for availing of provisions of income tax exemption if the facility, that are at the expense of the public exchequer, is provided to all political parties. ”

In yet another recommendation to check black money, the EC has asked the Law Ministry to ensure that political parties are made to register details of donors for coupons of all amounts on the basis of a Supreme Court order of 1996.

Coupons are one of the ways devised by the political parties for collecting donations and hence are printed by the party itself. There is no cap or limit as to how many coupons can be printed or its total quantum. Currently, the details of donors is not required for coupons with small amounts such as for Rs 10 or 20. “These smaller sums aggregate into a bigger amount and hence, they need to be accounted for, to ensure transparency,” the Commission said.


After reading this , you would not be surprised that , in India , we have 1,900 + , so called " Political Parties " , of which , possibly less than 20 may be " National " parties

I wonder how many donations of under Rs 20,000 , did all these parties receive , since 08 Nov announcement on demonetization ! Or , how many MILLIONS of COUPONS got printed !

My guess is : RS 2 LAKH*CRORE !  

Given the above-mentioned " loopholes " in the " donation declarations " required of Political Parties , is it any surprise that these small parties have become the latest entrants to the flourishing " Hawala " trade ( NEW for OLD notes , at a discount ) , since 08 Nov ?

Do not overlook the fact that these parties have powerful " friends " in all bank branches !

But , this recommendation from Election Commission could not have come at a more opportune time for the NDA government , what with 5 State Elections looming on the horizon , over the next 12 months

All that the Government has to do , is as follows :

Accept EC recommendation , making it effective from  01 Feb 2017

Go one step further and mandate that ALL donations ( even for ONE rupee ) , to political

   parties can only be made either ONLINE (on Party Web site, using Credit / Debit cards )

   or using any other DIGITAL PAYMENT method

Those ( smaller / regional ) political parties that wish to " merge " with any NATIONAL

    party, can do so by transferring their entire corpus of funds / assets to the NATIONAL

    party .

    In the hands of the NATIONAL party , this entire amount will be treated as " Anonymous

    Donation " .

   This " exemption " will only apply to parties " merging " before 31 Jan 2017


I imagine a frenzy of 1800 political parties rushing in to " merge " with BJP  !

Even as most will not survive , a few will " thrive "

I never cease to be amazed at the by-products of demonetization  !


19  Dec  2016

www.hemenparekh.in / blogs