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Fighting black money: Three key electoral reforms that may be on the anvil

22 December, 2016

Ever since Prime Minister Narendra Modi announced his decision to demonetise Rs 500 and Rs 1,000 currency notes, speculation has been rife on the next moves the government could make in its fight against black money.

Even as the government pushes for a cashless economy—or a “less-cash” economy, as finance minister Arun Jaitley says—political parties continue to receive donations in cash, with some like the Bahujan Samaj Party declaring absolutely no payments via cheques or other non-cash means. Since political parties are exempt by law from declaring details of donations below Rs 20,000, they are often used to launder money.

Yet, if news reports are to be believed, some electoral reforms that may have far-reaching consequences for political funding in India may be on the anvil.

Simultaneous elections for Lok Sabha and state assemblies: A report in The Economic Times on Thursday said that the Election Commission is getting ready to hold simultaneous elections for the Centre and states, although no bill for a constitutional amendment is on the anvil yet.

Simultaneous funding, say experts, will help curb poll expenses, and may reduce policy logjams as multiple states keep going to polls each year. In fact, in recent times, the issue of simultaneous elections has been mooted by none other than Modi himself.

Having said that, there could be significant constitutional barriers to the move. Elections often become necessary after coalition governments lose majority and no alternative formation can stake claim to power. In fact, even at the Centre, governments have collapsed at least on five occasions since Independence in 1947, necessitating three mid-term polls.

Moreover, if simultaneous elections are indeed conducted in 2019, it will mean that terms of a majority of state assemblies will have to be curtailed, while those of some may need to be extended, which political parties may not be ready for.

De-listing of political parties: On Wednesday, The Indian Express reported that the Election Commission could soon cancel the registration of as many as 200 political parties that exist mostly on paper and have either not fought a single election for more than a decade or won any seats. The report said that the commission could also soon write to the Central Board of Direct Taxes as it suspects that these parties may be nothing more than money laundering operations. India has seven national political parties, 58 state parties and 1,786 unrecognised ones, the report said.

Mandatory declaration of all donations: As far back as 2004, the Election Commission had recommended that political parties be mandated to declare all donations. Earlier this week, reports said that the poll panel had recommended to the government that political parties should be barred from accepting anonymous contributions above Rs 2,000. This, the panel says, could help bring about a greater level of transparency in the funding system.

In fact, a report released earlier this week by the Association for Democratic Reforms, a non-profit, said that national political parties declared just over Rs 102 crore in donations above Rs 20,000 from 1,744 donors. Declarations by the ruling Bharatiya Janata Party and the main opposition Indian National Congress made up more than 90% of the figure.

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Fighting black money: Three key electoral reforms that may be on the anvil

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