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Chief Election Commissioner Proposes Amendment In ‘Representation Of People Act’ In Letter To Kiren Rijiju

The Election Commission of India has proposed a draft modification, lowering the current cap of 20,000, which states that cash contributions to political parties over 2,000 rupees cannot be made anonymously. According to those with knowledge of the situation, it has also attempted to cap monetary contributions at $20 crore or 20% (whichever is lower) of the total donations collected by a party.

Chief election commissioner Rajiv Kumar suggested amending the Representation of the People (RP) Act in a letter to law minister Kiren Rijiju in order to “clear political funding landscape.”

Action against unrecognized parties was the initial move. On condition of anonymity, a person with knowledge of the situation stated that the Commission is currently trying to overhaul the way recognized parties operate and crackdown on black money and tax evasion.

Political parties are required to provide the poll watchdog with information about cash contributions of 20,000 or more, indicating the source of the payment.

The election board has also advised that each contender open a different bank account just for the election. “Two separate accounts must be formed for each election if a candidate wishes to run first as an MLA and afterwards as an MP. Basically, the candidate needs to register a separate bank account for each poll they are contesting. In this manner, the Commission may monitor the candidates’ spending caps and increase system openness,” the source claimed.

The Commission discovered that although several parties claimed they received no donations, their audited accounting statement revealed they had received sizable sums, demonstrating extensive cash transactions below the threshold limit of 20,000.

The Commission has requested that digital transactions or account payee cheque transfers be made mandatory for all expenses above 2,000 to a single entity or person in order to increase transparency into the expenditure of individual candidates running for office and to eliminate “fungibility” in this expenditure.

Rule 89 of the Conduct of Election Rules, 1961, will need to be amended.

To ensure that no foreign donations violate the RP Act and the Foreign Contribution Regulation Act of 2010, the Commission has also sought “electoral changes” to prevent this from happening. The current contribution report style is “not equipped” to seek out more information, and there is currently no means to expressly separate first international donations.

The decision was made shortly after the EC continued its crackdown on these organizations for failing to comply with the requirements of the RP Act by delisting 284 nonexistent but registered unrecognised political parties (RUPPs) and declaring 253 others inactive, according to the polling organization. With the most recent order, there are now 537 political parties that the poll panel has warned for violating electoral laws.

As part of a tax evasion investigation into RUPPs, the income tax authorities conducted searches at more than 50 locations across different states on September 7. On September 11, the IT department said that donations to Gujarat’s RUPPs totaled more than 4,000 crore in the previous three fiscal years.

The Commission reported in May that 199 RUPPs utilized income tax exemptions totaling 445 crore in 2018–19 and 219 RUPPs totaling 609 crore in 2019–20.

“In what ways will the Commission oversee cash? Only if it is declared can it be monitored, according to Jagdeep Chhokar of the nonprofit Association Democratic Reforms. “This law cannot be put into effect. The Commission’s underlying assumption is that individuals will openly disclose how much money they donated to politics or how much money political parties got.

The money that political parties have disclosed is only the top of the iceberg, according to Chhokar. “Much more money is spent on the elections.”

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