Illustration: Shyamal Banerjee/Mint
Illustration: Shyamal Banerjee/Mint

Political parties should accept public scrutiny

The claim that political parties are private entities is an impolite fiction

Political parties in India have for long defied any attempts at transparency. Citizens have little or no information about their internal functioning; their funding is opaque and for all purposes, they are like a black box whose working is not known. Efforts to change this have not worked. In this, India is unique: In most well-functioning democracies, funding —both sources and expenditure—are publicly available; in India, secrecy is the rule.

That may change after the Central Information Commission (CIC) delivered an important order on Monday. CIC has declared that political parties are public authorities under the Right to Information (RTI) Act, 2005. The order has evoked controversy.

There is controversy over the interpretation of a section of the RTI Act that defines public authorities. All political parties covered by the order—the Congress, the Bharatiya Janata Party, the Communist parties, the Nationalist Congress Party and the Bahujan Samaj Party—stoutly argued that they are private entities. The petitioners in the case cited the role of political parties in legislatures, especially their power to oust elected members under the anti-defection law; their obligation to report donation of money above 20,000 to tax authorities and; that the Election Commission of India (EC) allots them symbols and otherwise governs the party-cum-electoral system under various laws. In the end, however, CIC chose to rely on the substantial tax breaks and land provided to parties at highly concessional rates by the government as a ground for their public character. If any non-government organization is funded, directly or indirectly, by the government, then under the RTI Act it is a public authority.

These, however, are narrow legal and technical issues. The broader issue is that of the link between political parties and state power. If political parties are private organizations, surely they are in a very special class. Any country has thousands of private organizations—from publicly listed companies to private firms to civil society organizations to non-profit companies. But only political parties contest elections and put forward claims to form government. If anything, such privileged organizations require far greater scrutiny than other private entities. In India, the situation has been turned on its head: the finances of private companies and non-governmental organization are far more transparent than those of any political party.

This point is important and takes the issue beyond the much abused public-private distinction. For example, it has been argued that if public-private distinction is important, then CIC should ask every school that has been given land at concessional rates to disclose that fact. That, however, is not the point here. Schools are not in the business of allocating resources or taking far-reaching decisions affecting the lives of millions of citizens. They certainly do not contest elections. The issue is that of authority and not the public-private distinction alone.

It has been argued that financial scrutiny beyond a point will cramp the functioning of parties and invade privacy. This is a false claim, if only for a very practical reason. Contesting elections in India is an expensive affair. While EC has prescribed strict limits on campaign expenditure, it is an open secret that these are in multiples of the official limits. These elections, it must be remembered, are very different from elections to clubs or other private organizations. For, once elected, many winners are placed in executive authority, having immense power to bestow favours. This is a situation with an in-built conflict of interest. Any person donating a large amount to a party will not do so for charity. It is only rational to expect him to seek a return favour. This is especially true for contributions by private—for-profit—companies. This is also the fountainhead of corruption in India. Tweaking of policies to suit individuals and companies and the misallocation of resources and large-scale corruption can be blamed on this non-transparent relation between funding and (ab)use of executive power. In India, this problem is acute as resources are not allocated by markets but by governmental discretion.

Finally, at a philosophical level, it is not clear why political parties should be accorded special—transparency denying—privileges in a democracy. The great feature of democracy as the French thinker Alexis de Tocqueville said is its levelling nature. According a privileged status to a group, or a set of individuals, or a party for that matter, sets them apart. This is a feature of an aristocracy or a dictatorship and not democracy.

As it stands, CIC’s order is likely to face judicial challenge sooner or later. This will be on the narrow ground of what constitutes substantial funding of a private organization. It is important that courts take a lenient and not a narrow, accounting, view of the funding situation of parties. Otherwise, the road to political transparency will have to be built anew.

Should political parties be forced to reveal their sources of funding? Tell us at views@livemint.com

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