Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Thursday 4 January 2018

Electoral Bonds


So  Much  for  Transparency   !

Economic Times ( 03 Jan ) carries following news :

“ FM Details Nuts & Bolts of Bonds for Poll Funding “

HIGHLIGHTS :

·         Donors can buy these bonds and give them to the party of their choice.

·         The party can en-cash them through designated bank accounts within 15 days.

·         The bond will be a bearer instrument in the nature of a promissory note that's issued by select State Bank of India branches to valid account holders


·         Electoral bonds would be issued/purchased for any value in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1crore from specified branches of SBI 

·         The bonds will be available at the designated SBI branches for 10 days each in January, April, July and October as specified by the Centre. This will increase to 30 days in the year that Lok Sabha elections are due.

·         They will not earn any interest and only Indian citizens or bodies incorporated in the country can purchase them. Strict conditions will be put in place to check misuse and prevent financial wrongdoing. 

The purchaser would be allowed to buy electoral bonds only on due fulfilment of all know your customer (KYC) norms and by making the payment from a bank account


The electoral bond will have a life of only 15 days during which it can be used for making donations only to parties registered under Section 29A of the Representation of the Peoples Act, 1951


The 15-day period has been prescribed to ensure that they do not become a parallel currency.


Only political parties that got at least 1% of the total votes polled in either the last
      assembly or general election will be eligible to accept electoral bonds, ruling out
   those formed after the last poll. This is to prevent the floating of bogus parties just
   before an election to collect funds. 

Although the buyer has to fulfil KYC norms, the bonds will not carry the person's name.


Since the name of the payee will not be disclosed to the Election Commission, donations will remain anonymous.


This will help in a scenario in which donors may be hesitant to be identified as supporting a particular party.


Every political party will file before Election Commission return as to how much money has come through electoral bonds



·         The bond shall be en-cashed by an eligible political party only through a designated bank account with the authorised bank (SBI)

·         The government intends to have just a few designated SBI branches, most
     likely only one in a state, for issuing electoral bonds, sources said. No other bank
     can issue the bonds

The bonds will also put a stop to funds being diverted within political parties, the government hopes

====================================================
MY   TAKE  :

·         Since “ Something is better than nothing “ , we must welcome this initiative

·         But , imagine the following scenario :


#   Mr  Antani of Alliance Industries , buys bonds worth Rs 5 crores from his
     company’s SBI bank account , after due KYC verification.
     He buys 2 bonds , one of Rs 3 crore and another of Rs 2 crore
    
     Having used his Company’s bank account, this entry would have to appear in
     his Company’s year-end Balance Sheet / Annual Report ( a document in public
     domain )  – under heading “ Purchase of Electoral Bonds “ – which is visible to
     all

#   Mr Antani  meets , General Secretaries of  2 political parties and
     hands over those papers , IN PERSON (- not surprising , considering that the
    bond does not carry the donor’s name – and of course, you want to be
    remembered  ! )
    So, each of those General Secretaries, know how much bond money his party
    got from Alliance Industry
    
    But he has no idea of how much donation Alliance Industry gave to how many
    other parties – until he looks up that Balance Sheet !  Now he can guess , who
    got and how much from Alliance Industry ! And he will remember while
    taking decisions

#   Of course, the following will not know who gave how much donation to which
     political party :

   En-cashing Bank ( of the Political Party )
Election Commission will know

Public

            As if this was not enough , the amended Income Tax Act reads :

      “  Any contributions received by way of electoral bond shall be excluded from
       reporting “

   Does anyone have any doubt that the whole idea behind introduction of Electoral
   Bonds is ,

·         not to introduce TRANSPARENCY , but to reinforce existing ANONYMITY
 
·         to ensure that no relation ( Quid pro Quo ) can ever be established between a donor and a government largesse to that donor

·         to ensure that neither the Income Tax department , nor the Election Commission ,nor any watchdog organization ( such as ADR ), nor the citizens can examine the records of political parties ( Who gave How much to Whom and spent Where ! )

·         to ensure that cash donations of Rs 2000 or less , can continue un-abated  

=======================================================
Could the NDA government done anything different to bring about true TRANSPARENCY , to the entire issue of Political Funding ?
YES , if it had the courage to implement my following blog / email [ 06  July  2017 ] : 

====================================================       
Thursday, 6 July 2017

Transparency in Political Funding ?



Economic Times ( 06 July ) carries a report titled :


“ Political Funding Next on Radar : FM “



As per this report , Shri Jaitley said :


=====================================================


“ We are looking at some major steps to be announced by which we want to cleanse the entire political funding in India


For the last 70 years, the world’s largest democracy has survived on funding which really brings no credit to the democracy and I think it has been the prime minister’s insistence that this has to be one of the subjects that the government has to take up now as a top priority “




We are aware of some modest reforms ( electoral bonds / cap on cash payments ) that Shri Jaitley introduced in the last budget


But no one believes that these reforms go far enough ( - including CEC ! )


Millions of Indians ( but no political party ) want ALL donations , irrespective of the amount involved , to be by official / transparent channels ( cheque / Online Payment etc ) , and want mandatory filing of INCOME / EXPENSE statements with CEC !


I request Shri Jaitleyji to consider following suggestion :




STRUCTURE


·         No direct donations ( even Rs 5 ) by anyone to any Political Party or to any Political Leader ( even as birth-day gift ! )


·         Creation of a CENTRAL ELECTION FUND CEF ) , controlled / administered by the Central Election Commission


·         Donations can only be given to CEF – and only by cheque / online etc , quoting Aadhar number



·         Donations will get tax exemption as CSR


·         CEC will publish , on its web site , a continuous / dynamic / daily ACCOUNT of amounts received ( with Aadhar No of each donor ) and amounts spent / disbursed by CEC to Political Parties / Candidates ( with full details of each )


·         From CEF , Election Commission will distribute FUNDS to political parties for fighting elections / other expenses , on predetermined ‘ Occasions 



PROCESS

·         Funding of Political Parties by CEC ( from CEF ) , can be made as per following two alternatives :


[ A ]    AFTER  THE  ELECTION ( CANDIDATE – based Reimbursements ) :


#  After each Election ( Central / State / Municipal ) , ALL candidates contesting the election ( including independent candidates ) , shall submit to CEC , a STATEMENT of EXPENSES incurred in fighting the election.


Even if a group of parties have come together to fight the election ( MahaGathBandhan ), each candidate will get linked to ONE party only



#  Statement will be as per format decided by CEC , giving category-wise expense details ( all payments listed in the statement , must be through legal / official channels , such as Cheque / Electronic Bank Transfer / Mobile Wallets etc )



#  There will be UPPER LIMITS of REIMBURSEMENT for each category of expense and an overall limit



#  The statement will also show the “ Sources of Funds “ ( with full details such as OWN or borrowed from CLOSE RELATIVEs , with names )



#  Actual amount to be reimbursed to each candidate , will be computed based on a number of factors , main factor being the “ percentage of popular votes polled “ by that candidate ( no reimbursement for those candidates who get less than 5 % of popular vote )



#  Actual re-imbursements made by CEC , shall not be counted as INCOME of that candidate , for Income Tax purpose




[ B ]   BEFORE  THE  ELECTION ( PARTY – wise ADVANCES ) :


# Before each election , All recognized Political Parties will get ADVANCES from CEF , computed using aTRANSPARENT , mathematical formula , based on following factors :


# FACTORS with POSITIVE WEIGHTAGE :

·         In all the elections since independence ( Central + States + Municipal ) , percentage of popular votes polled by each party in those elections along with the percentage of seats won by each party



·         Number of years for which the party has been recognized by CEC



·         Cumulative number of “ Days “ ( not months or years ) , each party was in power ( Centre + States + Municipality ) since independence


·         No ( or percentage ) of seats “ won “ in each election



     #   FACTORS with NEGATIVE WEIGHTAGE :


·         No of MPs / MLAs having criminal cases pending against them


·         No of times candidates / parties were “ warned “ by CEC ( for any reason )


·         No of years for which Annual Return NOT filed with EC


·         No of candidates / Legislators convicted by a Court



DEAR SHRI JAITLEYJI :



Above mentioned suggestion , is by no means , comprehensive


You may want to consider a HYBRID MODEL which is a combination of the alternatives listed above



It is important that all the figures / data used in the FORMULA , are supplied only by the Election Commission and theSpeakers of various legislatures – and made public



Since there is no way political parties will reach a consensus on my suggestion , best way would be to publish an onlineSURVEY QUESTIONNAIRE and ask citizens to vote / rate , against each item of suggestion and then publish theFINDINGS ( on ALL government web sites ) , on a continuous basis


It would be too much to expect the Political Parties to accept this reform without building up pressure from 800 + million voters .


You may even consider a REFERENDUM !

04  Jan  2018
www.hemenparekh.in / blogs  



With Regards,

hemen  parekh 
( M ) +91 - 98,67,55,08,08


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