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LATEST NEWS UPDATES | The path to reforms: Ensure enforcement, bring clarity - Devesh Kapur, E Sridharan and Milan Vaishnav </title>
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-Hindustan Times
Election Commission of India (ECI) is outgunned when it comes to confronting those who circumvent existing campaign finance rules and lacks power to sanction candidates.
It is a truism to note that political finance sits at the heart of corruption..."/>
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Election Commission of India (ECI) is outgunned when it comes to confronting those who circumvent existing campaign finance rules and lacks power to sanction candidates.
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<h1 class="cat-box-title">The path to reforms: Ensure enforcement, bring clarity - Devesh Kapur, E Sridharan and Milan Vaishnav</h1>
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Published on</span><span class="text-date"> Jul 28, 2018</span>
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<div align="justify">-Hindustan Times<br /><br /><em>Election Commission of India (ECI) is outgunned when it comes to confronting those who circumvent existing campaign finance rules and lacks power to sanction candidates.<br /></em><br />It is a truism to note that political finance sits at the heart of corruption in modern India. While politicians publicly lament the status quo, they privately profit from the current system. Therefore, the fact that the Narendra Modi government has made reforming political finance an important priority, is worth both acknowledging and evaluating. Given the infirmities associated with India’s system of managing the flows of money in and out politics, how effectively have its initiatives addressed the entrenched challenges?<br /><br />In understanding the state of play, four stylised facts characterise India’s political finance regime. First, there is virtually zero transparency around political contributions. In the majority of cases, it is impossible to identify who is making contributions, and to whom. Second and related, given the premium placed on anonymity, contemporary Indian politics is a cash-intensive business. Third, political party accounts are a black box. While parties are required to submit audited accounts to the Election Commission of India (ECI), they are under no obligation to subject their books to independent scrutiny. <br /><br />Finally, ECI is outgunned when it comes to confronting those who circumvent existing campaign finance rules. For example, the agency has neither adequate power nor resources to sanction candidates for even blatant misrepresentation on disclosure forms.<br /><br />This is the context in which one needs to understand and evaluate the Modi government’s political finance reforms. The changes introduced by the government broadly fall into two categories. First, the government launched a high-octane war on cash — best exemplified by its November 2016 decision to demonetise high-value rupee notes.<br /><br />Furthermore, in the 2017 Finance Act, the government instituted a new Rs 2,000 threshold for cash contributions (down from Rs 20,000). In addition, in the 2017-2018 budget, the finance minister announced a new financial instrument called ‘electoral bonds’ — time-limited bearer bonds that private entities can purchase from scheduled banks and donate to political parties.<br /><br />The funds would flow entirely through the formal banking system, thereby reducing the reliance on cash contributions. The upshot is that neither the party nor the private entity is required to disclose the transaction.<br /><br />Second, the government also eased limits on corporate giving. First, it eliminated the cap on corporate donations (which previously stood at 7.5% of a corporation’s average net profits over the previous three years) and second, it dropped the requirement that firms declare their political contributions on their profit-and-loss statements. <br /><br />Please <a href="https://www.hindustantimes.com/india-news/the-path-to-reforms-ensure-enforcement-bring-clarity/story-bAXcP4jHXxBWYtlsCYUCwL.html" title="https://www.hindustantimes.com/india-news/the-path-to-reforms-ensure-enforcement-bring-clarity/story-bAXcP4jHXxBWYtlsCYUCwL.html">click here</a> to read more. <br /></div>
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<br><a href="https://www.hindustantimes.com/india-news/the-path-to-reforms-ensure-enforcement-bring-clarity/story-bAXcP4jHXxBWYtlsCYUCwL.html" class="re" target="_blank">Hindustan Times, 27 July, 2018, https://www.hindustantimes.com/india-news/the-path-to-reforms-ensure-enforcement-bring-clarity/story-bAXcP4jHXxBWYtlsCYUCwL.html</a><div class="clear"></div>
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<h1 class="cat-box-title">The path to reforms: Ensure enforcement, bring clarity - Devesh Kapur, E Sridharan and Milan Vaishnav</h1>
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<div align="justify">-Hindustan Times<br /><br /><em>Election Commission of India (ECI) is outgunned when it comes to confronting those who circumvent existing campaign finance rules and lacks power to sanction candidates.<br /></em><br />It is a truism to note that political finance sits at the heart of corruption in modern India. While politicians publicly lament the status quo, they privately profit from the current system. Therefore, the fact that the Narendra Modi government has made reforming political finance an important priority, is worth both acknowledging and evaluating. Given the infirmities associated with India’s system of managing the flows of money in and out politics, how effectively have its initiatives addressed the entrenched challenges?<br /><br />In understanding the state of play, four stylised facts characterise India’s political finance regime. First, there is virtually zero transparency around political contributions. In the majority of cases, it is impossible to identify who is making contributions, and to whom. Second and related, given the premium placed on anonymity, contemporary Indian politics is a cash-intensive business. Third, political party accounts are a black box. While parties are required to submit audited accounts to the Election Commission of India (ECI), they are under no obligation to subject their books to independent scrutiny. <br /><br />Finally, ECI is outgunned when it comes to confronting those who circumvent existing campaign finance rules. For example, the agency has neither adequate power nor resources to sanction candidates for even blatant misrepresentation on disclosure forms.<br /><br />This is the context in which one needs to understand and evaluate the Modi government’s political finance reforms. The changes introduced by the government broadly fall into two categories. First, the government launched a high-octane war on cash — best exemplified by its November 2016 decision to demonetise high-value rupee notes.<br /><br />Furthermore, in the 2017 Finance Act, the government instituted a new Rs 2,000 threshold for cash contributions (down from Rs 20,000). In addition, in the 2017-2018 budget, the finance minister announced a new financial instrument called ‘electoral bonds’ — time-limited bearer bonds that private entities can purchase from scheduled banks and donate to political parties.<br /><br />The funds would flow entirely through the formal banking system, thereby reducing the reliance on cash contributions. The upshot is that neither the party nor the private entity is required to disclose the transaction.<br /><br />Second, the government also eased limits on corporate giving. First, it eliminated the cap on corporate donations (which previously stood at 7.5% of a corporation’s average net profits over the previous three years) and second, it dropped the requirement that firms declare their political contributions on their profit-and-loss statements. <br /><br />Please <a href="https://www.hindustantimes.com/india-news/the-path-to-reforms-ensure-enforcement-bring-clarity/story-bAXcP4jHXxBWYtlsCYUCwL.html" title="https://www.hindustantimes.com/india-news/the-path-to-reforms-ensure-enforcement-bring-clarity/story-bAXcP4jHXxBWYtlsCYUCwL.html">click here</a> to read more. <br /></div>
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<h1 class="cat-box-title">The path to reforms: Ensure enforcement, bring clarity - Devesh Kapur, E Sridharan and Milan Vaishnav</h1>
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<div align="justify">-Hindustan Times<br /><br /><em>Election Commission of India (ECI) is outgunned when it comes to confronting those who circumvent existing campaign finance rules and lacks power to sanction candidates.<br /></em><br />It is a truism to note that political finance sits at the heart of corruption in modern India. While politicians publicly lament the status quo, they privately profit from the current system. Therefore, the fact that the Narendra Modi government has made reforming political finance an important priority, is worth both acknowledging and evaluating. Given the infirmities associated with India’s system of managing the flows of money in and out politics, how effectively have its initiatives addressed the entrenched challenges?<br /><br />In understanding the state of play, four stylised facts characterise India’s political finance regime. First, there is virtually zero transparency around political contributions. In the majority of cases, it is impossible to identify who is making contributions, and to whom. Second and related, given the premium placed on anonymity, contemporary Indian politics is a cash-intensive business. Third, political party accounts are a black box. While parties are required to submit audited accounts to the Election Commission of India (ECI), they are under no obligation to subject their books to independent scrutiny. <br /><br />Finally, ECI is outgunned when it comes to confronting those who circumvent existing campaign finance rules. For example, the agency has neither adequate power nor resources to sanction candidates for even blatant misrepresentation on disclosure forms.<br /><br />This is the context in which one needs to understand and evaluate the Modi government’s political finance reforms. The changes introduced by the government broadly fall into two categories. First, the government launched a high-octane war on cash — best exemplified by its November 2016 decision to demonetise high-value rupee notes.<br /><br />Furthermore, in the 2017 Finance Act, the government instituted a new Rs 2,000 threshold for cash contributions (down from Rs 20,000). In addition, in the 2017-2018 budget, the finance minister announced a new financial instrument called ‘electoral bonds’ — time-limited bearer bonds that private entities can purchase from scheduled banks and donate to political parties.<br /><br />The funds would flow entirely through the formal banking system, thereby reducing the reliance on cash contributions. The upshot is that neither the party nor the private entity is required to disclose the transaction.<br /><br />Second, the government also eased limits on corporate giving. First, it eliminated the cap on corporate donations (which previously stood at 7.5% of a corporation’s average net profits over the previous three years) and second, it dropped the requirement that firms declare their political contributions on their profit-and-loss statements. <br /><br />Please <a href="https://www.hindustantimes.com/india-news/the-path-to-reforms-ensure-enforcement-bring-clarity/story-bAXcP4jHXxBWYtlsCYUCwL.html" title="https://www.hindustantimes.com/india-news/the-path-to-reforms-ensure-enforcement-bring-clarity/story-bAXcP4jHXxBWYtlsCYUCwL.html">click here</a> to read more. <br /></div>
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LATEST NEWS UPDATES | The path to reforms: Ensure enforcement, bring clarity - Devesh Kapur, E Sridharan and Milan Vaishnav
The path to reforms: Ensure enforcement, bring clarity - Devesh Kapur, E Sridharan and Milan Vaishnav
Published on Jul 28, 2018
Modified on Jul 28, 2018
-Hindustan Times
Election Commission of India (ECI) is outgunned when it comes to confronting those who circumvent existing campaign finance rules and lacks power to sanction candidates.
It is a truism to note that political finance sits at the heart of corruption in modern India. While politicians publicly lament the status quo, they privately profit from the current system. Therefore, the fact that the Narendra Modi government has made reforming political finance an important priority, is worth both acknowledging and evaluating. Given the infirmities associated with India’s system of managing the flows of money in and out politics, how effectively have its initiatives addressed the entrenched challenges?
In understanding the state of play, four stylised facts characterise India’s political finance regime. First, there is virtually zero transparency around political contributions. In the majority of cases, it is impossible to identify who is making contributions, and to whom. Second and related, given the premium placed on anonymity, contemporary Indian politics is a cash-intensive business. Third, political party accounts are a black box. While parties are required to submit audited accounts to the Election Commission of India (ECI), they are under no obligation to subject their books to independent scrutiny.
Finally, ECI is outgunned when it comes to confronting those who circumvent existing campaign finance rules. For example, the agency has neither adequate power nor resources to sanction candidates for even blatant misrepresentation on disclosure forms.
This is the context in which one needs to understand and evaluate the Modi government’s political finance reforms. The changes introduced by the government broadly fall into two categories. First, the government launched a high-octane war on cash — best exemplified by its November 2016 decision to demonetise high-value rupee notes.
Furthermore, in the 2017 Finance Act, the government instituted a new Rs 2,000 threshold for cash contributions (down from Rs 20,000). In addition, in the 2017-2018 budget, the finance minister announced a new financial instrument called ‘electoral bonds’ — time-limited bearer bonds that private entities can purchase from scheduled banks and donate to political parties.
The funds would flow entirely through the formal banking system, thereby reducing the reliance on cash contributions. The upshot is that neither the party nor the private entity is required to disclose the transaction.
Second, the government also eased limits on corporate giving. First, it eliminated the cap on corporate donations (which previously stood at 7.5% of a corporation’s average net profits over the previous three years) and second, it dropped the requirement that firms declare their political contributions on their profit-and-loss statements.
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