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VIEWPOINT: KAUTILYA
A
Level Paying Field
Financing
the democracy surplus is as important as reducing the fiscal deficit.
By Jairam Ramesh
 There
are two things important in politics, said American politician Mark Hanna
in 1896, "the first is money and I can't remember what the second
is". Across the world, whether it is the US, Germany, France, Japan
or England, the issue of political financing is now occupying centrestage.
In India too, the Tehelka tapes episode has brought this issue into sharp
focus. While the Tehelka expose does establish a "level p(l)aying
field" for political corruption, it also offers a opportunity
for cleaning up the non-transparent way in which our democracy
is financed.
India is the only major democracy in the world
where there is no mechanism for the public exchequer supporting elections.
State funding will not eliminate, only reduce corruption. In the US, where
federal funds are used in presidential campaigns since 1976, there is
now a big debate taking place on how to curb the influence of "soft"
money-that is, funds which go from corporations, unions, foundations and
wealthy individuals to political parties-as opposed to "hard"
money which flows to individual candidates. And although Germany has strict
laws for state financing, Helmut Kohl, the man who single-handedly redrew
European geography and rewrote European history during his tenure, has
had his reputation shattered by illegal contributions he received on behalf
of his party.
 In
India, the idea of state funding of elections has impeccable political
and intellectual lineage. The idea was first mooted way back in January
1972 by the Joint Committee of Parliament on Amendments to Election Law
that had among its members none other than Atal Bihari Vajpayee and L.K.
Advani. Thereafter, in 1990, a committee set up by the V.P. Singh government
under the chairmanship of Dinesh Goswami, then the Union law minister,
reiterated the idea.
Next, in September 1998, a committee of MPs
chaired by Indrajit Gupta and having, among others, Manmohan Singh and
Somnath Chatterjee as members, worked out some details of such state funding.
Finally, the Law Commission under the chairmanship of B.P. Jeevan Reddy
backed the Gupta Committee's recommendations fully in its 170th Report
on Reform of Electoral Laws submitted to the government in May 1999. But
it said that state funding must be preceded by incorporation of legislative
provisions in the Representation of the People Act, 1951 to ensure (i)
inner-party democracy; (ii) regular maintenance, auditing, submission
and publication of accounts by political parties; and (iii) deletion of
the present provision that excludes expenditures incurred on behalf of
a candidate by the party or anybody else while calculating the expense
of the candidate in elections.
Assuming Rs 10 a voter, the Gupta Committee
suggested that a separate election fund be created with Rs 600 crore contribution
coming annually from the Central government and another Rs 600 crore from
the state governments. The committee emphasised that state funding should
be in kind-facilities like accommodation, communications, fuel, postage,
publicity material and electoral rolls-and not in the form of cash. But
where was this money to come from?
The Gupta panel mentioned that an election cess
could be levied on profit-making companies, or funds now being provided
for the MP Local Area Development Scheme (MPLADS) could be diverted to
create a corpus. Of the two, the second option is preferable. In 2001-02,
the allocation for the scheme, under which Rs 2 crore is given to every
MP for work in his or her constituency, is Rs 1,580 crore. Ever since
MPLADS was most ill-advisedly introduced in 1993, Manmohan Singh has been
advocating that either the whole or half of it should be used to set up
a corpus for state funding of elections. Arun Shourie, the minister in
charge of MPLADS, calls the scheme "organised loot". Even if
half the existing MPLADS allocation is diverted, we can start with a sizeable
election fund of about Rs 800 crore. But given their awful fiscal position,
states will find it impossible to chip in. Parties can also finance their
annual non-election year requirements from such a fund-for the Congress
this sum works out to around Rs 10 crore. To augment the corpus, individuals
and companies could be allowed to contribute to this fund on a tax-deductible
basis and contributions could also be welcomed from overseas Indians.
In the 1998 and 1999 Lok Sabha polls, the Election
Commission allotted free time on Doordarshan to all political parties
but only for speeches. This is a form of state funding. To salvage his
image, and in the larger national interest, Vajpayee should now spearhead
the creation of a separate election fund that will finance normal political
activities as well as elections. Nobody can dare oppose him now.
(The author is with the Congress party.
These are his personal views.)
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