EC proposes lowering anonymous political donations from Rs 20,000 to Rs 2,000

Aiming for reforms and transparency in donations received by political parties, the Election Commission has proposed reducing anonymous political donations from Rs 20,000 to Rs 2,000.

Sources said that the poll panel wrote a letter to the Union Law Ministry recommending various amendments in the Representation of the People Act.

Recently, the Commission delisted 284 non-compliant registered unrecognised political parties (RUPPs), declaring more than 253 of them inactive. Earlier, the Income Tax Department raided a number of such entities across the country on charges of tax evasion.

Currently, political parties have to disclose all donations above Rs 20,000 through their contribution report that is submitted to the EC.

Sources said that the Commission has proposed lowering the threshold limit for cash donations made to political parties from Rs 20,000 to Rs 2,000. In case the proposal gets approved, all donations above Rs 2,000 will be part of the contribution report which is submitted to the Commission.

There are a few political parties which have shown contributions above Rs 20,000 as nil, while their audited accounts statement showed receipt of huge amounts - all less than the limit of Rs 20,000.

The poll panel has also proposed to limit cash donations at 20 per cent or at a maximum of Rs 20 crore to cleanse election funding of black money.

Sources said that the proposed amendments will also lead to maintaining a separate account for receipt and payments related to elections by the candidate and the same has to be transparently disclosed to authorities as election expenditure.

Moreover, the Commission also wants every candidate to open a separate bank account for poll purposes which will have all the details related to all expenses and receipts as part of the election expenditure.

Sources said that electoral reforms proposed by the Election Commission also include segregation of foreign funds from the funds of the parties for more transparency into funding to political parties.

The sources said, at present, there is no mechanism to segregate foreign donations at the initial stages specifically, and the present format of contribution report is "not equipped" to seek additional information.

The Commission, therefore, has sought for a broad discussion on the subject between different stakeholder ministries to come up with a mechanism to identify and deter prohibited foreign donations.

Another area of concern that has been identified by the EC is the violation of foreign exchange regulations, they said.