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The Mother India

  A Home page to achieve Electoral reforms, true democracy & citizens sovereignty in India

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Political Funding Reform Civil Society Should Act

------------------Jayaprakash Narayan

For a few fleeting days after the Tehelka revelations, our somnolent political class actually raised some hopes of reform. There were early signs of responding to people’s urges to cleanse the system.  With a few resignations and some with-drawals of support the government seemed shaky.  The prime minister characterized the episode as a wake-up call. He pleaded for electoral and other reforms.   And then, as suddenly as it all began, the issue got sidetracked. Our politicians promptly went back to what they are good at – petty power games.  It was business-as-usual.

The message of Tehelka is not about who is in power and who is out.  We cannot pretend any longer that there is no corruption, or that it exists only in the lower echelons of government.  Corruption pervades the system and is corroding our nation. The industrial class has a great stake in curbing it.  In the pre-liberalization era industry had a cozy relationship with politicians and bureaucrats. The entrepreneur paid bribes to secure licenses and then went on to pay monthly or annual mamools to buy peace. Near-monopoly rights to produce and sell within the country, and protection from external competition ensured that the entrepreneur was still a gainer.

The manufacturer could produce shoddy goods and sell them to hapless consumers at a premium, covering his costs and corruption, and yet ensuring a tidy profit.   But with opening up of the economy and de-licensing of industry, things have changed.  Manufacturers are discovering that high quality of goods, competitive prices and corruption cannot coexist. Unless corruption is curbed, the situation for many industries is disastrous. 

A few months ago, well before Tehelka or BPVerma’s arrest, the small entrepreneurs of Andhra Pradesh had gone on a war path and successfully fought the monumental corruption in central excise. 

As Mark Twain said, nothing concentrates the mind more powerfully than the knowledge that you have only 15 days to live!  It is now recognized that elimination of corruption is no longer merely a moral imperative, it is an economic necessity. 

We cannot afford to let politicians get away once again with shibboleths and inaction.  What we need is tangible, practical reform.  The starting point is political funding reform, the contours of which are clearly visible.  There are six specific areas of funding reform. 

Firstly, we should recognize that political activity is a noble endeavor, and should be funded legitimately.  Tax credits need to be given for political contributions.  Secondly, there should be full disclosure of all funding, both by the giver and the recipient.  The accounts of candidates and recognized political parties should be audited (the latter by the Election Commission), and made public.  Thirdly, the explanation under section 77 of The Representation of the People Act, 1951, which made nonsense of election expenditure ceilings (by exempting the money spent by parties and ‘friends’) should go.  There should be reasonable ceilings fixed from time to time, and all expenditure should be included in ceiling limits.  Fourthly, the candidates should, by law, publicly disclose their assets and incomes (including those of the family members).  Fifthly, non-disclosure or false disclosure should invite severe, even draconian, penalties, including fines, disqualification, de-recognition of parties and mandatory prison terms both for the giver and the taker.  Only when the risk increases with non-compliance, will there be full disclosures.  Finally, when these reforms are in place and after parties conform to internal democratic norms, we can think of public funding.  Such funding can be indirect in the form of free time on radio and television (both public and private) for recognized party candidates.  Any direct funding should be non-discretionary and by measurable indicators.  To qualify, there should be a vote threshold in a constituency and the candidate will be reimbursed a fixed sum of, say Rs. 5 or 10 per vote obtained. 

This reform in itself will not eliminate corruption, but it can be a good starting point.  We should make it possible for honesty and power to coexist. Campaign finance reform can eliminate the alibi for corruption.  But who will bell the cat? The politicians have lost the will to reform.  Civil society cannot be an idle spectator.  This is too important to be left to our representatives alone.  We have reputed and decent citizens in all walks of life. Narayana Murthy, whose corporate responsibility is by now legendary, and Ratan Tata who attempted to create a corpus for honest political funding, and many others who care deeply for clean politics should take the lead. The activists, media, jurists and politicians should all join hands. We owe it to our children to leave a better country behind. The time to act was yesterday. Fortunately it still is not too late. 

Illegitimate Election Expenditure Root Cause of Corruption 

Elections involve organization of political parties, mobilizing public opinion and campaigning to convey the message to the voters. Parties need money for organization and mobilizing public opinion and to compete in the market place of ideas. Candidates need money to get themselves known and to reach the voters and communicate effectively. Our failure to evolve rational methods for raising necessary resources for electoral campaigns and curb unaccountable use of money has severely distorted the electoral process. Excessive, illegal and illegitimate expenditure in elections is the root cause of corruption. In India the expenditure in legislative elections is often 10 to 15 times the legal ceiling prescribed.  

The actual ceilings, revised in 1997, are Rs.6,00,000 for Assembly constituencies in major States, and Rs. 15,00,000 for Lok Sabha constituencies. Almost every elected legislator violates this ceiling with impunity. 

In effect, the expenditure ceiling has become meaningless, and the spirit of the law is violated with impunity by most parties and candidates. Even the letter of the law is often violated. Section 13(A) of the Income Tax Act (IT Act) exempts from tax the income of a party from house property, other sources and voluntary contributions. 

Parties are bound by law to maintain accounts regularly, record and disclose the names of all donors contributing more than Rs.10,000 and have the accounts audited by a qualified accountant as defined in Section 288(2) of the IT Act. In 1978, Section 139(4B) was inserted in the IT Act and this provision, read with Section 13(A) makes it mandatory for the party to file returns every year. Since 1985, companies are permitted to contribute up to 5% of their profits to political parties, with full disclosure.  Despite all these legal provisions, it is widely known that most major political parties have been collecting undisclosed and unaccounted corporate and individual contributions. Most parties have been violating the statutory requirement of filing returns of income.   Despite Supreme Court directions in 1996 on a petition filed by the Delhi-based Common Cause, no action has been taken against the parties and persons who have been violating the law.  From the foregoing, it is easy to appreciate that much of the expenditure related to electoral campaigns is unaccounted and illegal. Even more importantly, this expenditure in most cases is illegitimate and excessive. Most expenditure is incurred not for legitimate campaign purposes, but for buying votes, bribing officials and hiring hoodlums. As already mentioned the actual expenditure is several times the ceiling limit, and sometimes it exceeds 10 to 15 times the ceiling prescribed. 

In one major state, corruption money may well be of the order of Rs.60,000 crores over a five year period. The vast bureaucracy is involved in extortion of money for providing myriad public services. For every elected legislator, there are over 4000 appointed public servants. 

Abnormal and unaccountable expenditure on this scale is unsustainable without huge corruption, and has grave consequences to society and governance. Such expenditure needs to be recouped in multiples to sustain the corrupt system. The high risk involved in election expenditure in a winner-take-all process, the long gestation period required for most politicians who aspire for legislative office, the higher cost of future elections, and the need to involve the vast bureaucracy in the web of corruption mean that this undisclosed expenditure leads to monumental corruption. 

Estimates indicate that the unaccounted expenditure for all state assembly and Lok Sabha elections in a cycle of 5 years is about Rs. 7000 crores.  This means that the political system needs about Rs. 70,000 crores (10times) over five years to sustain this cycle.  In turn, petty bureaucrats and senior officials will be collecting vast sums - ten to twenty times this amount.  The total collection of bribes in India over a 5 year period is thus of the order of Rs. 700,000 crore. 

The vast bureaucracy is involved in extortion of money for providing myriad public services. For every elected legislator, there are over 4000 appointed public servants. If bulk of them retain a small sum as collection fee for each service, then the actual amount extorted from the public is at least ten to twenty times the amount which reaches the political class. 

Money is collected for practically every public service, from a birth certificate to electricity connection.   The inconvenience, delay, humiliation, harassment and lost opportunities suffered by the citizens, as well as the cost of distortion of market forces on account of corruption probably mean that the social cost of this extortion is much more than the actual amount of money changing hands. 

Unaccounted and illegitimate election expenditure is thus translated into huge corruption and siphoning of money at every level.  Corruption is further fuelled by other factors - centralizaton, failure of justice system and absence of instruments of accountability.  As explained in the article  ‘Limitations’ on page 20, political funding reform alone cannot improve the situation.  But clearly high and unaccounted election expenditure is the root cause of corruption at every level in the country.  In the very least, such undisclosed electoral expenditure provides an alibi for corruption at every level.   In addition, this ubiquitous corruption alters the nature of political and administrative power and undermines market forces, efficiency and trust on a much larger scale. The results are distortion of democracy and retardation of economic growth.  Obviously, any meaningful attack on corruption has to begin with political funding reform.

Problems with Current Legal Provisions 

Explanation 1 added in 1974 to Section 77 of the Representation of the People Act, 1951 made a mockery of the election expenditure ceiling, by excluding the expenditure incurred by parties and others from the purview of ceiling limits. 

The income of a political party is exempt from income tax under Section 13 (A) of the IT Act.  Parties, in return, are bound by law to maintain accounts regularly, record and disclose names of donors contributing more than Rs.10, 000 and have their accounts audited by a qualified accountant as defined in Section 288 (2) of the IT Act.  Under Section 139 (4B) of the IT Act, inserted in 1978, parties shall furnish returns of income to the IT authorities.  However, there is neither provision for public auditing and public disclosure, nor are severe penalties attached to non-compliance.  Given the power and primacy of parties, the IT authorities are reluctant to act against parties for violations of law, despite clear rulings of the Supreme Court.

Since 1985, companies are permitted to contribute upto 5% of the profit to political parties. But in the absence of strict disclosure norms backed by severe penalties for non-disclosure, both parties and donors find it expedient not to disclose these contributions.  Donors are afraid of possible political retribution from other parties.  Parties and donors also do not wish to let the public know the link between a political contribution and favours doled out to them by a party in power. 

Also parties and candidates are loath to disclose funding, as most expenditure is both illegal (beyond ceiling limits) and illegitimate (for buying votes, bribing election officials and hiring musclemen).

There are no asset and income disclosure norms applicable to candidates while contesting, and to elected representatives while assuming public office.  In the absence of public scrutiny and severe  legal penalties there are many rags-to-riches stories in politics, and the assets of many politicians far exceed the known sources of income. Weak laws and ineffective enforcement made political corruption an integral part of our system. 

Even where laws exist, absence of severe penalties and an effective mechanism to enforce them makes them ineffective. We need to dramatically increase the risks of non-compliance and make them unacceptable in order to enforce a fair degree of compliance.  The obligation to disclose should be imposed on the donors as well as recipients and the penalties must be very severe for both. 

Also parties and candidates are loath to disclose funding, as most expenditure is both illegal (beyond ceiling limits) and illegitimate (for buying votes, bribing election officials and hiring musclemen). 

However we must recognize that political activity, electoral contest and people’s representation are legitimate public activities.  If the cost of these activities has to be borne by the candidates themselves, or a few donors, then political participation will be limited to those who can marshal resources. Two consequences follow: most of the time of politicians will be spent in mobilizing resources for political activity; and corruption will be an inevitable result. 

Therefore public funding should be considered as a serious option.  However there should be three  essential conditions for public funding: the mechanism devised should be fair, transparent, practical and acceptable; there should be strict monitoring to ensure that politicians do not cheat by using public funding even as they raise unaccounted resources and buy their way into public office; and as only party candidates matter in most elections, internal democracy in political parties, including selection of candidate by members or their delegates through secret ballot is vital for public funding. 

The legal infirmities cited have made elections a high-cost, high-risk, high-profit proposition for many unscrupulous elements. The result is an unending spiral of corruption, abuse of office, electoral malpractices and mal-administration. 

Several committees have already made valuable recommendations to set right the situation and cleanse our public life.  Dinesh Goswami Committee, Election Commission, Law Commission, Indrajit Gupta Committee , National Commission to Review the Working of the Constitution, and the Supreme Court have made several insightful observations. 

Lok Satta’s Proposals for Political Funding Reform 

Based on various committee reports and best practices prevalent in other democracies across the world, Lok Satta has come up with a set of practical, enforceable and tangible reform proposals. 

Three basic premises constitute the core of these proposals.  First, politics is a noble endeavour, and citizens and corporate bodies should be encouraged to fund legitimate political activity.  The typical Indian middle-class approach to political activity is counter productive. Liberty and rule of law are not sustainable without active competitive politics and electoral contests.  We should therefore make it easy, not difficult to raise legitimate funds for political activity. 

Second, transparency of all such fund transfers is at the heart of any meaningful funding reform.  Such transparency should be enforced at both the donor and recipient levels. Disclosure obligations should be backed by severe, even draconian penalties for non-compliance.  Only when there is a real risk, however small, of being jailed for non-discloure will a donor insist on transparency.  No donor is likely to deliberately invite a prison term after having contributed liberally (and secretly) to political coffers. 

Third, public funding should be considered only after other funding reforms are in place, and after parties are democratised and regulated.  Any public funding to be successful should be limited, fair, transparent, verifiable and non-discretionary.  The proposals of Lok Satta outlined below are centered around these essential elements: 

Measures to Encourage Political Funding – Tax Incentives and Ceilings 

All individual contributions to candidates or parties for political and election activity shall be 100 % exempt from income tax subject to a ceiling of, say Rs.10,000. Total ceiling on contributions from an individual to all candidates and parties put together shouldn’t exceed Rs.50,000 in a calendar year.  

100% tax exemption for all corporate contributions with a ceiling of 5% of the net profit not exceeding Rs. 50 lakhs for national parties and Rs. 10 lakhs for state parties.

Corporate contributions shall be subject to the following norms:

- As mentioned above no contribution shall exceed 5% of the net profit.

- A company which receives state subsidy or has a decision or contract or license pending with  

   government shall not contribute.

- Contributions by Public Sector enterprises are prohibited 

-  Prohibited to individual candidates.  

Measures to Enforce Disclosure and Accountability - Penalties 

Every individual contribution totaling Rs.1000/- or more  and every corporate contribution to candidates or political parties for any political activity shall be disclosed with full particulars of  identity, address and other details of donors. All contributions exceeding Rs.500 /- shall be by  cheque  only.  Both the donor and recipient shall be obliged to make full disclosure to the Election Commission and the Income Tax authorities.  Penalty for non-disclosure or false disclosure shall be:  

Donors: fine equal to ten times the contributions and imprisonment for six months.

Candidates:  disqualification for six years, fine equivalent to ten times the amount not disclosed, and imprisonment for at least one year.

Parties: de-recognition and de-registration for five years, fine equivalent to ten times the amount not disclosed, and imprisonment of office bearers for three years. 

Penalties for not furnishing audited statement of accounts shall be de-recognition of the political party until accounts are furnished. 

 The parties shall file returns every year, and after every election. The candidates shall file an audited statement after the election. The penalty for not furnishing audited accounts shall be:

Candidates: disqualification for a period of six years or until accounts are furnished, whichever is later.

Parties: de-recognition of the political party until accounts are furnished. 

Every political party and candidate shall submit the audited statement of accounts to the Election Commission as well as the Income Tax authorities in the prescribed proforma. Every political party and candidate shall make available to the public the audited accounts for the financial year by September 30, through print and electronic means. Copies shall be made available to any member of the public by the Election Commission on payment of a nominal fee, as well as publishing them electronically. 

Every candidate shall disclose his/ her income and assets along with those of his family members at the time of the nomination. There shall be annual disclosure of income and assets of elected legislators and their family members. False or incomplete disclosure will invite confiscation of undisclosed properties and assets, disqualification for six years and imprisonment for three years. Non-declaration will invite automatic disqualification. 

If the Election Commission shall be the final authority to receive statements of income, and assets as well as political contributions and expenditure, their verification and auditing, and determination of false disclosure or non-disclosure. The Commission’s determination of noncompliance on an application or suo motu shall automatically invite penalty ten times the amount and disqualification for six years, and in case of parties, de-recognition and deregistration for five years. Ordinary criminal courts or special courts appointed for the purpose will have jurisdiction to try related offences and sentence the guilty to imprisonment.

Measures to Limit Campaign Expenditure 

There shall be a reasonable ceiling on expenditure in elections as decided by Election Commission from time to time. Explanation I under Section 77 of The Representation of People Act, 1951 should be repealed. All expenditure including that incurred by a political party or any individual or group to further the electoral prospects of a candidate shall be included in the election expenditure. 

Penalty for violation of ceiling shall be a fine equal to five times the excess expenditure. 

There shall be reasonable ceilings fixed on television/radio/newspaper advertisements. 

Measures to Prevent Abuse of Office 

Government shall not issue any advertisements containing the name of a person or party or    photograph of any leader.

No government advertisement shall be issued listing any achievements of a particular government.

Government transport or infrastructure shall not be used for political campaigning.

No contribution shall be received from any person or corporate body in respect of whom any  decision or license or contract or claim of subsidy or concession of any nature is pending with the  government.

Measures for Indirect Public Funding - Media 

Free television and radio time shall be given in state media to registered parties as prescribed by  the Election Commission. 

Private electronic media shall earmark time for recognised parties as prescribed by the Election   Commission for election-related campaign.  The licensing conditions should be suitably amended  by law. 

There shall be election debates telecast and broadcast live by all electronic media as per the  directions of the Election  Commission. 

Pre-Conditions for Public Funding 

Political Party regulation to ensure internal democracy

Party candidates to be democratically selected by secret ballot by members or their elected delegates

Democratic selection of candidates

Decriminalization of politics

Rectification of defects in electoral rolls

Elimination of voting fraud through introduction of voter identity cards and electronic voting.

Strict disclosure and penalty norms 

Essential Elements of Public Funding 

Transparent

Verifiable

Non-Discretionary

Incentive for performance

Encourage private resource mobilization

Prevent fragmentation

Fair to new parties and independents

Finite cost to exchequer

Equal treatment of all candidates 

Public Funding to party candidates shall be contingent upon the party candidates being selected democratically by secret ballot - by members of the party or on assembly of elected delegates of the party members in the constituency. 

Gist of Proposals for Public Funding 

Rs. 10 per vote polled .

Independent and party candidates to be treated on par as long as they pass the threshold of 10 % of   valid votes polled in the constituency to become eligible for public funding.

Party gets 1/3 of the eligible funding, and candidate receives 2/3 of the funding.

Parties to receive 50 % of advance  @ Rs.5 per vote based on their performance in earlier  elections.

Independents to be reimbursed after the poll.

Stringent enforcement and strict penalties for non-compliance of disclosure norms. 

How Public Funding Works? – Candidates 

At constituency level, the candidates who obtain over 10 % of valid votes shall be eligible to receive public funding ( n votes)  

Each candidate shall be eligible to receive a maximum of a fixed amount, say Rs. 10 for each vote  polled (Rs.10n) 

If the candidate is put up by a political party, then at the constituency level 2/3 of the amount will  be the ceiling s/he would be eligible to receive. The balance will go to the party, subject to other  rules governing funding (Rs.20n/3). 

The actual money the candidate will be eligible to receive will be equal to lowest of the following:

20n/3, based on no. of votes polled 

or 

l-m, based on the expenditure ceiling limit (l), less the sum of the money raised by him, and received in cash or kind from the party (m): 

or 

1.5c, based on 1.5 times the contributions raised by the candidate (c), excluding party support 

The total money raised by the Candidate by way of contributions, party support and  public funding shall not exceed the constituency ceiling limit, or the actual expenditure incurred 

From the above, the Public Funding will be 20n/3, or (l-m) or 1.5c, whichever is lowest, where:

n =  no. of votes polled by the candidate (provided n exceeds 10% of total valid  votes polled.)

l = expenditure ceiling limit for the constituency

m = money raised by the candidate + received from the party in cash or kind

c = contributions raised by the candidate. 

For non-party candidates, the funding will be similar except that the eligibility will be 10n and not 20n/3. Therefore the public funding will be 10n, or  (l-m) or 1.5 c, which ever is lowest. 

Example: 

Let’s say the expenditure ceiling limit (l) for a parliamentary constituency is Rs. 50 lakhs.   A party candidate raises Rs. 10 lakhs in private contributions (c) and receives Rs 10 lakhs from the party (m) and polls 2,00,000 valid votes (n). The actual money the candidate will be eligible to receive will be equal to the lowest of the following: 

- 2/3 of  the amount at  Rs. 10 per valid vote =  2/3 of 10 x 2,00,000  = 2/3 of   Rs. 20,00,000 = approx. Rs. 13.3 lakhs 

or 

-  The expenditure ceiling limit (l), less the sum of the money raised by him, and the sum received in cash or kind from the party (m) = 50,00,000 –   (10,00,000+10,00,000) = Rs.30,00,000. 

Or 

-  1.5 times the contributions raised by the candidate = 1.5 x 10,00,000 = Rs. 15,00,000 

Therefore the candidate will be eligible to receive public funding to the tune of Rs.13.3 lakhs according to the above formula. 

How Public Funding Works? – Parties 

The basis for public funding to a party will be the total no. of votes obtained by the party in constituencies in which its candidates become eligible for public funding (N

The eligibility ceiling for public funding will be Rs.10N/3 (Rs.20n/3 goes to candidates) 

The actual amount disbursed to the party will be as follows:  

1.5 times the total contributions (C) received by the party = (1.5C) 

or 

1/3 of the total election expenditure ceiling prescribed (L) in all those constituencies in which its candidates are eligible for public funding, less the contributions raised by the party (C), whichever is lower. That is, 1.5C or L/3-C, whichever is lower 

The party’s share of public funding will therefore be 10N/3 or L/3-C or 1.5 C whichever of these is the lowest; where: 

N = Total no. of valid votes polled by the party in all constituencies where its share of votes is

        10 % or more

L = The sum of legal ceilings on expenditure in these constituencies

C = Contributions raised by the party. 

Example: 

Let’s say the party has 50 candidates who are eligible to receive public funding and the expenditure ceiling limit in each constituency is Rs. 50 lakhs. 

The expenditure ceiling limit for the party in all the 50 constituencies together will be:

-  L/3 = 1/3 x 50 x 50,00,000 = approx. Rs. 8.3 crores 

Let’s say the party has raised Rs. 2 crores (C) in private contributions and the party candidates have polled 1,00,00,000 (N) valid votes in all constituencies where their vote share is more than 10%. The actual amount disbursed to the party will be the lowest of the following: 

10N/3 = approx. Rs.3.3 Crores 

or 

- L/3 - C = 8.3 - 2 = Rs.6.3 Crores 

or 

- 1.5C = 1.5 x 2 = Rs. 3.0 Crores 

Therefore the party will be eligible to receive public funding to the tune of Rs.3 crores according to the above formula. 

Cost of Public Funding 

Let us now calculate the cost of public funding in India.   

 -  Population                                                    101 crore 

 -  Estimated no. of eligible voters                      60  crore  

-  Actual votes polled (at 60% )                         36 crore 

Exclude 40% from funding on account    of eligibility criteria and limits imposed 10% voting threshold, ceiling limits, matching funds, funds raised by parties and candidates. 

- Balance required for funding:              22 crore. 

Funding cost at Rs.10 per vote is  Rs.220 crores for the Lok Sabha elections, to be borne by the Union government. 

Funding cost for State Assemblies may be Rs. 250 crore on account of likely higher percentage of  voting. This will be borne by the States. 

A Public Fund for Political and Campaign Funding 

The Union and States shall start such Public Funds.

All contributions from individuals and corporate bodies will receive the benefit of 150 % tax  exemption without subject to any ceiling.

The Public Fund shall be operated by the Election Commission, and candidates and parties will be  funded from that Fund as per the norms. 

Miscellaneous 

Any expenditure to give inducements to voters, distribute gifts, bribe public officials involved in conduct of election, or hire any workers or gangs for any unlawful activity shall be unlawful. Penalties for such unlawful expenditure shall be disqualification of the candidate for six years, a fine equivalent to ten times the expenditure incurred and imprisonment for three years. 

The Election Commission shall determine the compliance of this provision and make public these declarations. The EC shall be the final authority to decide on complaints of false declaration. 

Limitations of Political Funding Reform 

The above proposals will go a long way towards cleansing our electoral process, and ensuring accountable and fair use of money in elections. However, we still need to answer two questions – Why are citizens selling their vote for money? What is the guarantee that these reforms will prevent  large scale vote buying? 

As a net result of several distortions, elections have lost their real meaning as far as the people are concerned. It is often tempting to blame the illiterate and poor citizens for this plight of our democracy. But in reality it is the democratic vigor and enthusiastic participation of the countless poor and illiterate voters, which has sustained our democracy so far. However, most people have realized with experience that the outcome of elections is of little consequence to their lives in the long run. If, by a miracle, all winners in an election lose, and all their immediate rivals are elected instead, there will still be no real improvement in the quality of governance. This remarkable inertia and the seeming intractability of the governance process have convinced citizens that there is no real long-term stake involved in electoral politics. 

Therefore many poor citizens are forced to take a rational decision to maximise their short-term gains. As a result the vote has become a purchasable commodity for money or liquor.  Quite often it is a sign of assertion of primordial loyalties of caste, religion, group, ethnicity, region or language. 

When there is a clear link between their vote and public good, and when taxes can be directly translated to the public services, people will start using vote as an effective tool to make fine political judgments and elect their servants. 

Sometimes without even any material inducement or emotional outburst based on prejudices, the sheer anger against the dysfunctional governance process makes most voters reject the status quo. 

Often this rejection of the government of the day is indiscriminate and there is no rational evaluation of the alternatives offered. In short, even the illiterate, ordinary voter is making a rational assumption that the vote has no serious long-term consequences and the choice is between Tweedledom and Tweedledee. Therefore he is attempting to maximise his short-term material or emotional gain! Often all these factors - money and inducements, rejection of status quo, and primordial loyalties together determine the voting pattern. 

This situation can be corrected only by decentralizing power, and exercising authority as close to the citizen as possible in an accountable manner. When there is a clear link between their vote and public good, and when taxes can be directly translated into public services available to them  people will start using vote as an effective tool to make fine political judgments and elect their servants rationally to maximize public good. 

Political Parties Internal Democracy 

It is obvious that we cannot regulate party funding in isolation. Openness, accountability, disclosure and democracy are indivisible, and there has to be an effective legislation to regulate the conduct of political parties in respect of democratic norms in membership, leadership choice, funding and choice of candidates for elective office.  

The German federal law regulating the conduct of political parties is a good model to emulate in our quest to democratise parties and cleanse electoral process.  From a bird’s eye view of Indian political parties, it is clear that we, as a people, have stakes in their functioning and future. The moment they seek power over us, and control over state apparatus, they forfeit their claim to immunity from public scrutiny and state regulation based on reasonable restraints.  This is particularly true in a climate in which they have proved to be utterly irresponsible, unaccountable and autocratic, perpetuating individual control over levers of power and political organization, entirely for personal aggrandizement, pelf and privilege.  Therefore, in a deep sense, the crisis in political parties is a national crisis, and has to be resolved by a national effort.  This leads us to the inescapable conclusion that there should be internal democracy in parties, regulated by law, and monitored and supervised by statutory authorities. Every party, by law, should be obligated to practice internal democracy in all respects. The details of functioning can be left to the party’s own constitution, but it should conform to the broad principles of democracy stated clearly in law. The actual practice of internal democracy should be verifiable by an external agency, say the Election Commission. 

This leads us to the inescapable conclusion that there should be internal Democracy in parties, regulated by law, and monitored and supervised by statutory authorities. Every party, by law, should be obligated to practice internal Democracy in all respects. 

Mandatory  publication of membership rolls of political parties at local level, election of leadership at every level by secret ballot supervised by the Election Commission, a comprehensive prohibition on nominations of office bearers or expulsion of rivals, a well-established system to challenge the leadership of incumbents at every level, and justiciability of these internal democratic processes through special tribunals – all  these measures  could form the basis of any meaningful reform and regulation of political parties.  Extreme care and caution should, however, be exercised to ensure that a party’s democratic choices of leadership or its espousal of policies are not in any way directly or indirectly influenced by law or external monitoring agencies. The party leaders and its policies should be judged only by the public, in the market place of ideas and in elections. 

Compulsions of First-past-the-post system - Case for Proportional Representation 

In addition to the electoral irregularities, use of unaccounted money power and criminalisation of politics, the first-past-the-post (FPTP) system in a plural society added to the decline in political culture. On the one hand the largest party is likely to obtain disproportionate presence in legislature, with consequent mariginalisation of large segments of public opinion.  In a plural society such a majoritarianism has evidently led to ghettoization of numerically important groups like minorities and dalits. 

On the other hand, in the FPTP system, there is desperation to somehow win the election in a constituency by all means fair or foul, as each seat becomes critical in the legislative numbers game to form government or acquire influence in the Westminster model.  

The ugly practices adopted by a party at the constituency level become somehow acceptable in this quest for electoral success. Once a candidate obtains party nomination, he and his caste or group often make it an issue of personal prestige to be elected in the winner-take-all electoral and power game. 

As election in each constituency runs on similar lines, the parties and candidates are not inhibited by the fear that their illegitimate efforts to win a few constituencies might undermine the larger objective of enhancing the voting share in a whole state or the nation. 

Another feature of the FPTP system is that reform of the polity becomes more and more difficult. Genuine reformist groups with significant but limited resources and influence have no realistic chance of success in the FPTP system and they tend to wither away. 

In a system in which winning the seat by attracting the largest number of votes is all-important, honest individuals or reformist parties fighting against the electoral malpractices and corruption have very little chance of success. This tends to perpetuate the status quo, and people will have to live with the unhappy choices among parties, which are more like Tweedledom and Tweedledee. 

Political process becomes increasingly incestuous, and even as power alternates between parties, the nature of the power game and the quality of governance remain unaltered. 

The political system has thus become fossilized over the years and is self-perpetuating. Fresh breeze of electoral reforms is vital to rejuvenate the political process and to inject institutional self-correcting mechanisms to revitalize our democracy.  

Similarly, a shift towards direct election of the head of the government at the local and State levels is likely to help reduce election expenditure and polling irregularities, and ultimately defections and corruption. 

Clearly, the exclusive reliance on the first–past–the–post system coupled with the Westminster model has enhanced the stakes in the constituency elections. High election expenditure, buying of votes and polling irregularities have become the norm in order to gain electoral advantage in the Westminster model. 

Therefore a shift towards proportional representation in which a party’s representation depends on the overall percentage of votes in each State in worth considering. Such a shift will act as a disincentive to polling irregularities, as any effort of a candidate to gain unfair advantage locally may run counter to the party’s objective of maximizing its vote in a whole State.  The proportional representation may also help force reform in political parties, as credible challenge is mounted by influential sections of public opinion which might otherwise be ignored in a first–past–the–post system. 

Similarly, a shift towards direct election of the head of the government at the local and State levels is likely to help reduce election expenditure and polling irregularities, and ultimately defections and corruption.  Such a direct election with clear separation of powers at the national level is fraught with the real danger of authoritarianism in a power-centered society.  But there are no logical or political arguments against such a system of direct election at the cutting edge level in states and local governments.  In fact, there are numerous advantages of minimizing electoral malpractices, checking corruption, enhancing executive efficacy and enforcing accountability. 

The time for comprehensive electoral reforms is near at hand. Any complacency in this vital task of electoral reforms will be disastrous to our polity and public interest. The people of India deserve a political process which brings the best out of our citizens and cleanses the governance process. 

Therefore a shift towards proportional representation in which a party’s representation depends on the overall percentage of votes in each State in worth considering. 

Electoral reform should be the first and vital step in our struggle for holistic democratic reform to build a strong, self-governing, just India with all citizens enjoying peace, freedom, harmony and dignity.

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