Political Parties, Black Money and DemonetizationSeveral messages are circulating on Whatsapp that are very telling. One of them says till now, politicians used to appeal to the people to maintain peace whenever there was some uprising, but since demonetization, some politicians are using all their might to instigate people to rise against it and the common people are asking them to exercise restraint.
By Sunil Garodia
How true this is! Despite the hardships the people are facing, there has been no public outcry against demonetization. Apart from small tiffs at bank counters or ATMs, resulting in temporary blockades of nearby roads, citizens have by and large accepted that the move is well intentioned and they are bearing the hardships with a resolve not seen in peaceful times in India. Despite some politicians and a section of the anti-Modi media trying their best to discredit the move, people have not come out on the streets. Since their first tactic has failed, the politicians are now resorting to the tried and tested ruse of bringing out designer protest rallies, full of herded party workers, to show that the 'public' is against the move. The Communists have also called a Bharat bandh on Monday 28th of November, as if they have any support to show outside of Kerala and Tripura. They did not even think that their fear-induced bandh might make the nation lose more than the conversion cost of the new currency.
The shock and awe that the smaller parties faced once demonetization was announced is not surprising. The Association for Democratic Reforms (ADR) informs us that more than 75 percent of the income of national parties is from unknown sources. Congress (82.5 of income from unknown sources), BJP (73), CPM (53.8) BSP (62) and NCP (91.5) lead the pack. The next logical step for the government to take is to make it mandatory for political parties to accept any funding above Rs 1000 by banking channels with the full name and address of the person making the donation. If the amount exceeds Rs 10000, quoting the PAN must also be mandatory. Unless political funding is made transparent, how does one root out corruption and black money? For, parties who get funding from unknown sources are just pumping back corruption or extortion money through this channel. If people are willing to donate to them freely and out of their own will, they will be more than happy to give the same through banking channels.
Those political parties that resist this move will immediately become suspect in public eyes. Why hide the source of their income? They are running political parties and not mafia operations. Money laundering by political parties must be stopped. It is not uncommon to see party cadre extort money from auto unions, taxi unions or the like in the name of union activities. There are hundreds of other ways how payments to party leaders from syndicates and other illegal operations are pumped back into the party funds. If these funds were held in cash in old currency notes, it explains the huge ghost queues at banks for changing notes and the spurt in deposits in Jan Dhan accounts. It was just the party faithful exploring all means to please their leaders and save party funds.
Unless Modi takes the next bold step of election funding reforms, demonetization will not work fully. His thinking of introducing state funding of elections is flawed and will be a huge burden on the exchequer. Instead, limits for spending on elections should be upwardly revised to bring it close to the spending actually done and accepting funds above Rs 1000 through banking channels must be made mandatory. Politicians must not be given the luxury of accepting huge amounts in cash and then put them in the bank account saying that an X number of party supporters had donated the same in small amounts. Bring political parties and politicians in line, the rest will follow.