A Case for Regulation of Political Parties in India through Statute-Part-I

Of late there has been a huge outcry regarding eradication of corruption from political sphere in India. It is generally argued that the political corruption is more on account of expenditure that political parties have to incur in contesting Assembly and Parliamentary polls. A conservative estimates by some put this figure as Rs.1.00-5.00 Crore per assembly seat and Rs.5.00-25.00 Crores per Lok-sabha seat. The expenditure depends the the type of constituency i.e. rual ,semi-urban ,urban or metropolitan. Some sources have put that in  2009 Lok-sabha election, the total expenditure incurred by all political parties was about  Rs.28,000 Crores.  However, these figures are not verified but even by general observation,  the conservative estimates as mentioned above seem reasonable.

But the question comes, why do political parties in India have to resort to corruption for survival whereas they do not indulge in such practice in other democracies. This write-up is an attempt to point out the flaws in the Indian Political System as compared to other  democracies.It may be clarified here that this write-up is only a preliminary examination  of the problem and the detailed scrutiny of the subject and remedies thereof requires much  labor as well as time. 

The Political Parties in India derive their existence from The Representation of People's  Act,1951(Act No.43 of 1951). The Political Parties have been covered in Section 29A,B & C of the act, the salient points of which are as follows :-

- Any association or Group of individual citizens calling themselves a Political Party have to make an application to the Election Commission for registration.(Section 29A(1)).

- The application should cover the details like Name of the Body, State where it is Head-quartered, names of its current Office-bearers,numerical strength of its members etc.(Section 29A(4))

- The decision of the election commission whether to accept or reject the application is final.(Section 29A(8))

- The Political parties can accept donation from any individual or company other than a government company.(Section 29B).

- The Treasurer of the Party has to submit an annual report to the Election Commission listing out the names of individuals and companies who have contributed more than Rs.20,000/- & Rs.25,000/- respectively in the financial year.(Section 29C)

From the above,it can be deduced that the provisions of the Act are criminally silent on  the income & expenditures incurred by the political parties every year, sources of income, Book of accounts, auditing of accounts or public disclosure of the accounts. The Political  Parties work in complete secrecy and out of public glare or scrutiny in their financial  matter.

Lately, there has been a public hue and cry that the RTI Act should be extended to political parties also so that their financial dealings can be scrutinised. The political  parties are vehemently opposing it on two accounts : #1 that they are not a corporate or  society or trust as defined in the Statutes and their internal workings are out of bounds of public domain and #2 that their opponents may use RTI to harass the parties and to give  them a bad name. Keeping in view that the secrecy  is beneficial to all the Parties  including the ruling party, therefore,the inclusion of Political parties in RTI Act looks  to be distant and difficult, if not impossible all together.

The Other way round and the more comprehensive one is to bring an Act dedicated to the  formation, representation and regulation of Political Parties in India just like The  Companies Act,1956. Interestingly, such comprehensive acts are under existence in many democracies around the world. The most elaborate act exists in the Federal Republic of  Germany called The Law on Political Parties(Party Law). In UK, the Political Parties are governed by The Political Parties, Elections & Referendums Act,2000(PPERA-2000). These acts elaborately cover the formation, registration, constitution and workings of political parties including preparation of Book of Accounts, compulsory auditing of the accounts and  public disclosure of annual accounts.In USA, there is no single act governing the political  parties but the political parties are governed by various Supreme Court rulings and  Amendments brought out in Senate from time to time.

(To be concluded)

By Sanjay Kumar

(The author holds a Masters Degree in Corporate Laws).