Election Commission keeps eye on cashless funding to restrict black money during elections

After lowering of the cap on anonymous donations to political parties to Rs 2,000 from Rs 20,000 per person, the Election Commission is looking at cashless funding as the ultimate goal to stem the use of black money in elections.

In an interview to PTI, Chief Election Commissioner Nasim Zaidi also warned that if parties try to sidestep proposed changes in election and income tax laws by taking advantage of any loophole, they will be dealt with accordingly.

“We may consult them on how to evolve a system. Cashless donations would be the ultimate. But whether we will be able to reach there, is the question. Ultimately the whole society is saying funding to political parties should be cashless.  That is the ultimate desirable,” Zaidi said.

The Commission has not started correspondence with political parties on the issue so far as “many other factors will have to be kept in mind”, the head of the country’s poll watchdog said.

Zaidi’s pitch came as experts suggested that efforts should be made to make donations to political parties totally cashless to usher in more transparency.

Admitting that many political parties depend on cash donations of small amounts, Zaidi said, “We have to look at the availability of infrastructure for digital transactions.  Will it be available in villages. I am not ruling it out. This should be the ultimate goal.”

He also maintained that the decision to reduce the cap on anonymous donations to political parties from Rs 20,000 to Rs 2,000 per person will help increase transparency.

Asked about the possibility of parties finding loopholes to circumvent the Rs 2,000 cap, Zaidi said, “I am not saying such a situation cannot arise. I am saying at least to some extent transparency will increase and anonymity will come down.”

To a question on parties using small denomination coupons or receipts to generate funds, he said the view of some parties is that if small donations do not come, they will suffer and these donations also help them in organising rallies.

He said if the Commission sees any misuse, it will deal with the complaint, accordingly.

The cap of Rs 2,000 per person on cash donations to political parties is a welcome move but the provisions can be made more stringent as parties can still find ways to bypass laws aimed at cleansing electoral system of black money, three former Chief Election Commissioners had recently told PTI.

Zaidi said the Commission will continue to pursue major electoral reforms such as use of totalisers, having multiple cut-off dates for 18-year-olds to register as voters, power to countermand polls on charges of use of money power, transparency of political funding, making bribery of voters a cognisable offence and paid news.

“These are eight to ten reforms which need to be segregated, given focus and taken to logical end. The Commission keeps pursuing it,” he said.

As part of a major move proposed in the Budget to cleanse the electoral system of black money, henceforth, political parties can receive only up to Rs 2000 in cash donations.

Announcing this, Finance Minister Arun Jaitley had said political parties will be entitled to receive donations by cheque or digital mode from their donors. As of now, the limit to accept political donations in cash is Rs 20,000.