Ec seeks to reduce anonymous political donations to Rs 2,000

By CNBCTV18.com IST (Released)

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The EC has also sought to limit cash donations to 20% or a maximum of Rs 20 crore of the total funds received by a party, whichever is lower. The EC has called for digital transactions or account payee check transfers to be made mandatory for all expenditure above Rs 2,000 for a single entity/person.

The Electoral Commission (EC) has proposed to reduce anonymous political donations from Rs 20,000 to Rs 2,000 and also to cap cash donations at 20% or a maximum of Rs 20 crore to clean up campaign funding from money black. Chief Election Commissioner (CEC) Rajiv Kumar has written a letter to Union Law Minister Kiren Rijiju recommending a series of amendments to the Representation of the People (RP) Act. The move came against the backdrop of the polling panel that recently deregistered 284 defaulting and non-compliant Unrecognized Registered Political Parties (RUPPs), declaring more than 253 of them inactive.

Earlier this month, the Income Tax (IT) Department raided these entities across the country for tax evasion after the EC shared its report with its administrative authority, the Central Office of Direct Taxes ( CBDT). Under the new proposals, the polling panel fought to lower the threshold limit for cash donations made to political parties from Rs 20,000 to Rs 2,000, PTI reported. In accordance with the rules currently in force, political parties must disclose all donations above Rs 20,000 through their contribution report which is submitted to the EC. Reports indicate that if the EC proposal is approved by the Ministry of Justice, all donations above Rs 2,000 will be flagged in the contribution report, thus improving the transparency of funding.

The EC found that while donations reported by some political parties were zero, their audited financial statements showed receipt of huge sums, proving large-scale cash transactions, below the Rs 20,000 threshold. The EC has also sought to limit cash donations to 20% or a maximum of Rs 20 crore of the total funds received by a party, whichever is lower. The EC has called for digital transactions or account payee check transfers to be made mandatory for all expenditure above Rs 2,000 for a single entity/person. The report states that once this amendment – to be made to Rule 89 of the 1961 Election Rules – is implemented, a candidate will be required to maintain a separate account for election-related receipts and payments and this should be disclosed transparently. to the authorities, as an account of election expenses. Although maintaining a separate bank account for election expenses is part of the instructions, the EC would like it to be part of the rules for the conduct of elections.

The EC also wants each candidate to open a separate bank account for election purposes, channel all expenses and receipts through this account, and provide these details in their election expenses account. The EC has also called for “election reforms” to ensure that no foreign donations slip into party funds, as stipulated in the PR Act and the Foreign Contribution Regulation Act of 2010 (FCRA).

With PTI entries