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Financial Status of Political Parties

The whole political system in India is founded on corruption. Crores are spent on elections. Recent estimates suggest that in a 5-year cycle, major political parties and candidates spend about Rs. 10,000 crores on elections to the Lok Sabha and State Assemblies. Most of these expenses are not legitimate campaign costs but money spent to buy votes, bribe people or hire musclemen.

Transparency at party level in money dealing is one the important corner stone of electoral reforms. An important step in ensuring transparency and accountability of political parties, particularly funding of political parties is scrutiny of their accounts by citizens.

In a move that is likely to lead to greater transparency and accountability of political parties, the Central Information Commission has held that copies of Income Tax Returns of the political parties filed with the public authorities (Income Tax authorities) and the Assessment Orders passed on them will henceforth be available to all citizens.

The order was passed by Central Information Commissioner, Shri A.N.Tiwari, on April 29, 2008.

The original application under the Right to Information Act (2005) was filed on February 28, 2007 before the Chief Public Information Officer (CPIO) of the Central Board of Direct Taxes (CBDT), New Delhi, on behalf of the Association for Democratic Reforms (ADR), a civil society group which has been in the forefront of the campaign for electoral and democratic reforms in the country, and works for improving the governance, democratic, political and electoral processes in the country. ADR sought copies of income tax returns of 21 political parties and assessment orders passed on them., When this request was turned down, first appeals were filed before the appellate authorities within the Income Tax department. It was after the first appeals were also turned down that the second appeal was filed before the Central Information Commission (CIC) on July 31, 2007. The second appeal was heard over two hearings, one on October 18, 2007, and the other on January 17, 2008.

Almost all political parties barring a few such as Communist Party of India (CPI), Asom Gana Parishad (AGP), Biju Janata Dal (BJD) and People's Democratic Party (PDP) opposed and fiercely resisted the Appeal. After long hearings and filing of protracted submissions by all parties, the Information Commissioner Mr. A.N.Tiwari held that "information which is otherwise exempt, can still be disclosed if the public interest so warrants. That public interest is unmistakably present is evidenced not only in the context of the pronouncements of the Apex Court but also the recommendations of the National Commission for the Review of the Working of the Constitution and of the Law Commission."

The decision further said that "Political financing and its potentiality for distorting the functioning of the government, has been the subject of wide public debate in contemporary democracies…(There is) the apprehension that non-transparent political funding … can inflict irreversible harm on the institutions of government. There is public purpose in preventing such harm to the body-politicDemocratic States, the world over, are engaged in finding solutions to the problem of transparency in political funding. ..It follows that transparency in funding of political parties in a democracy is the norm and, must be promoted in public interest. In the present case that promotion is being effected through the disclosure of the Income Tax Returns of the political parties.

It is now up to the citizens and civil society groups to use this available information about the internal financial functioning of political parties, to work towards improving democracy and governance in the country.

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