New Delhi
 The government’s recent demonetisation move may have an adverse effect on smaller parties that have been thriving on black money coming to them in the form of unaccounted donations in cash. Since the decision has coincidentally come just ahead of the Assembly polls in five states, including Uttar Pradesh and Punjab, it is likely to have a significant impact on the political parties and their election campaigns.

The Sunday Guardian spoke to a cross-section of leaders from different parties and all of them felt that transparency was required as far as funding of political parties is concerned, but this was not the right time to do it as a huge chunk of donations is received in cash.

They also felt that since big parties like the Congress and BJP get funding from big corporate houses, besides individual donations, they would not be affected much, but smaller regional parties, who will be active players in the coming Assembly elections in UP, Punjab and Goa, may get affected, as most of their expenses are met with this unaccounted money.

According to a senior JDU leader, smaller parties who have a history of dealing in cash are going to face a severe cash crunch because of the demonetisation. “They will obviously not support transparent funding,” he said.

Political analysts feel that the spending capacity of parties will see a decline in the coming Assembly elections. They also believe that the political parties should start making their funding transparent and the government should take the next step towards cleaning the donation system of the political parties. The experts said that it was the lack of political will that has held back major transparency reforms with regard to political funding.

“Those parties that get a lot of donations in the form of cash would have no money to either hold massive rallies after rallies or distribute cash among voters in the coming elections. And this should be the case with all political parties,” Anupama Roy, political science professor at the Jawaharlal Nehru University, told The Sunday Guardian.

However, another political scientist who did not wish to be named said that political parties have already started managing their money and funds, as donations to political parties do not come two-three months before the elections, but well in advance.

“They have already started distributing cash through their old currency notes and would have their way out,” he said.

Asked to comment on the topic, senior JDU leader K.C. Tyagi said: “We are a party that works for the downtrodden, poor and we have come up from the socialist background, where money was never considered important in politics. You can check our books, everything is done in a transparent way. The JDU will be very happy if funding to political parties is made transparent and through cheques and other transparent methods as political parties are the biggest beneficiaries and place for parking black money.”

BJP leader and Finance Minister Arun Jaitley had recently said in an interview that demonetisation would have an impact on the coming elections and political parties and elections would in turn become fairer. “There is only one political repercussion I want to see with this (demonetisation) and that is that politics and the process of elections will also get cleaned because of this. This will have an effect on political parties as well. So far in our country there has been a practice of invisible political funding; that will also have to be visible in a democracy,” he said.

According to Aam Admi Party (AAP) leader Somnath Bharti, demonetisation will have some impact on the upcoming elections for smaller parties as their funding is mostly from undisclosed sources and therefore would lead to a cash crunch for such parties. “Smaller regional parties in the UP election will try to get their stashed cash transferred into white. As far as the AAP is concerned, we have no problem with making funding of political parties transparent as all our donations are already open and transparent for anybody to scrutinise them,” he said.

Contacted for his party’s stand on transparent funding, Samajwadi Party leader Gaurav Bhatia said: “How can I tell you the party’s stand right away? Send your questions in writing. Don’t link every issue with demonetisation.”

A senior Congress spokesperson said there is indeed a need to make political funding transparent. “Ideally, all donations should be made either online or through cheque. Secondly, there should also be transparency in the file notings of bureaucrats. There is a need to make the election process cheaper so that any ordinary person can contest the elections for which state funding of elections should be considered,” he said. 

Elections in India have always seen an ugly influence of money, both at the state as well as at the national level. According to a report by the Association for Democratic Reforms (ADR), during the 16th Lok Sabha elections, the Election Commission had reported seizures of around Rs 300 crore of unaccounted cash and more than 17,000 kg of drugs and cache of liquor, arms and other items.

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