Yechury demands ban on corporate donations to political parties

Having legally challenged the Narendra Modi government's decision to issue electoral bonds, the Communist Party of India Marxist (CPM) now is seeking a ban on corporate donations to political parties in order to eliminate political corruption.

The petition filed by CPM General Secretary Sitaram Yechury seeks declaring as unconstitutional the Electoral Bond Scheme 2018 and amendments in the Finance Act, 2017, which allows for “unlimited donations from individuals and foreign companies to political parties without any record of the sources of funding”.

A day after the apex court admitted the petition and sought the Centre’s response, Yechury addressing a media conference in the national Capital said unless the supply side was hit, political corruption will not be eliminated.

“The first step towards ending political corruption is to ban donations made to political parties by the corporates. This is the supply side of corruption, and unless this is plugged political corruption cannot be ended. We keep on talking about the demand side of corruption but the supply side needs to be tackled,” he said.

Yechury said the electoral bond system was “an obscure funding system which is unchecked by any authority” and claimed it would lead to creation of shell companies and money laundering.

“On one hand we have the Bharatiya Janata Party (BJP) getting 89 per cent of all corporate donations in 2016-17 and on the other we have this government in the last three years virtually writing off more than Rs 2 lakh crore worth of non-performing assets.

“This is nothing but a perfection of the system of crony capitalism whereby corporates gain by such methods and you get donations. You have created a system now wherein corporates will set up shell companies and through them they will make the donations. All these talks of transparency in political funding by the government are nothing but a hoax,” said Yechury.

He also took a swipe at the BJP and the Congress over the government’s move to introduce an amendment with retrospective effect to the Foreign Contribution Regulation Act (FCRA) in the finance bill.

The proposed amendment introduced for the second time this year, will pave the way for both the BJP and Congress to escape legal scrutiny for receiving foreign contribution since 1976, the year FCRA regulations were introduced.

The government in 2016 had amended the FCRA by way of the finance Bill to tweak the definition of “foreign companies” and clearing the way for them to make donations to political parties. The amendment with retrospective effect, however, validated foreign donations received after 2010. The latest amendment now seeks validate donations prior to 2010.

“The government yet again has smuggled in an amendment in the finance bill with retrospective effect so as to legitimize foreign donations received by the BJP and the Congress.

“Objectively both the BJP and the Congress gain by this and it is like ‘Aankhon Hi Aankhon Mein Ishaara Ho Gaya’,” said Yechury, referring the Bollywood song to hint at a tacit understanding between the Congress and the BJP.

Yechury said allowing donations from foreign companies were “very dangerous” and “investment by the companies for trade off”.

He said the electoral bonds were a way to legalise political corruption and suggested corporate donations should be on the lines of corporate social responsibility (CSR).

“Instead of allowing the corporates to make donations to political parties, let there be a law that will define a certain percentage of their profits that will be given by then towards strengthening democracy. Let this corpus lead to a system of state funding of elections. The process of state funding will be far more transparent.

The Marxist leader called for deep-rooted electoral reforms including introducing proportional representation.

“Electoral reforms must also consider introduction of partial proportional representation. Otherwise, we have this anomaly of a party forming the government with less than a majority of the support of the people who have voted.

Edited by Joyjeet Das