The Hindu : Nod for Bill on increased donation to parties

Online edition of India's National Newspaper
Tuesday, Aug 05, 2003

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Nod for Bill on increased donation to parties

By Our Special Correspondent

NEW DELHI AUG. 4. Parliament today approved legislation under which political parties would not have to report any contribution up to Rs 20,000 from an individual or from a company. The earlier limit for non-reporting of contributions was Rs 10,000. Besides, companies contributing to political parties would get income tax exemption on the amount contributed.

The enhanced contribution limit is contained in the Election and Other Related Laws (Amendment) Bill 2003 which was passed by the Rajya Sabha today. The Lok Sabha had passed the Bill earlier. In fact, this legislation amends sections of the Representation of the People Act, 1951, the Companies Act, 1956 and the Income Tax Act, 1961.

The latest legislation also provides for partial State-funding of elections. This is to be achieved through a provision under which the Election Commission would supply specified items to the voters in the constituencies or to the candidates set up by recognised parties for the Lok Sabha and Assembly polls. The items to be supplied would be determined by the Central Government, in consultation with the Election Commission.

On company contributions, the latest legislation states that the treasurer of a political party or any other persons authorised by the party would in each financial year prepare a report in respect of any contribution in excess of Rs. 20,000 received from any person or company other than a Government company in that financial year.

In case the political party fails to submit the report, it would be denied any tax relief on such contribution. Simultaneously, under Section 80GGB of the Income Tax Act, an Indian company would be allowed to deduct from its total income any sum contributed in the previous financial year to any political party.

The legislation also provides for equitable sharing of time on cable television network and other electronic media during elections. The time allocated would be decided by the Election Commission on the basis of the past performance of a recognised political party.

Bringing in accountability

Replying to a debate on the Bill in the Rajya Sabha today, the Union Law Minister, Arun Jaitley, said this legislation was meant to infuse accountability in the entire process of corporate donations to political parties.

The Government had considered the recommendations of the Indrajit Gupta committee on funding of political parties and brought in the legislation to amend the Representation of the People Act, Income Tax Act and the Companies Act.

Initiating the discussion, the Congress member, Pranab Mukherjee, who heads the Parliamentary Standing Committee on Home Affairs that went into the Bill, said it was only a beginning to cleanse the political funding process. He demanded auditing of accounts of political parties besides continuing the system of allotting reserved symbol to only recognised political parties at national and State level. Mr. Mukherjee pointed out that company donations to political parties was not a new thing in the country and was in existence right from 1956 except during 1969 and 1985 when it was banned.

Welcoming the move to give tax incentives to companies contributing to political parties, he said it was a step which was absolutely necessary.

Members of smaller and regional parties like Satish Pradhan (Shiv Sena), Ramdeo Bhandari (RJD), Ram Gopal Yadav (Samajwadi Party), M. Sankaralingam (DMK) and P.G. Narayanan (AIADMK) said corporate funding would come only for big parties and leave smaller organisations to fend for themselves.

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