Roadmap for Answer Writing

Introduction

• Start with a brief explanation of electoral funding and its importance in democratic processes.
• Mention the current legal framework for election funding in India (e.g., Representatives of People Act (1951), Income Tax Act (1961)).

Challenges in Election Funding

1. Lack of Transparency
   • Political parties do not need to disclose sources of funding, making it difficult to track donations (Source: ADR Report).
2. Unregulated Political Party Expenditure
   • There are no limits on the spending of political parties during elections, unlike individual candidates.
3. Electoral Bonds
   • The anonymity of donors through electoral bonds enables untraceable donations, often from corporate sectors.
4. Disproportionate Influence of Wealth
   • Wealthy parties and candidates dominate elections, skewing fairness and equality.
5. Weak Monitoring Mechanisms
   • Limited enforcement of existing regulations and transparency laws.

Potential Solutions

1. Stronger Transparency Regulations
   • Cap anonymous donations and ensure detailed disclosure of donors’ information (Source: ADR Report).
2. State Funding of Elections
   • Implement state funding as recommended by the 1999 Law Commission report, reducing reliance on private donations.
3. Reform Electoral Bonds
   • Restrict or eliminate the anonymity granted by electoral bonds to curb untraceable political donations.
4. Enhance Election Commission’s Power
   • Empower the Election Commission of India (ECI) with more authority to penalize non-compliant parties.
5. Limit Corporate Donations
   • Reintroduce caps on corporate funding, similar to the 7.5% of profits cap under the Companies Act (2013).
6. Independent Auditing
   • Mandate that political parties maintain and audit financial accounts through independent auditors approved by the CAG.

Conclusion

• Summarize the importance of addressing election funding challenges to ensure transparency and fairness in elections.
• Emphasize that a combined effort of legal reforms and societal awareness can lead to a more democratic electoral process.

Key Facts

• Lack of Transparency: Political parties do not have to reveal the sources of their funds, leading to opaque donations (Source: ADR Report).
• Electoral Bonds: These have raised concerns over anonymity and influence from corporate donors (Source: ADR Report).
• Law Commission’s Recommendation: In 1999, the Law Commission suggested state funding of elections to reduce dependence on private funding.
• CAG Approval for Auditing: Political parties should be required to undergo audits by independent auditors, as recommended by the Comptroller and Auditor General of India (Source: ADR Report).