There are three fundamental issues we have to address in dealing with political and electoral funding. The first is our ambivalence on political contributions. Politics is the essence of a democracy. True politics is a noble endeavour. Politics helps bridge the gap between limited resources and unlimited wants. Politics also seeks to reconcile and harmonise conflicting interests of contending social groups. Politics pervades all areas of society and influences every facet of life. The middle classes will do well to shed their aversion to political process. The distaste for politics is a sure recipe for disaster. Our endeavour has to be to cleanse the political and electoral process, and not to throw the baby with the bath water. Clean politics requires clean money. We should therefore give tax exemptions to all political contributions subject to reasonable limit of, say Rs 25000 for individuals and 5% of the net profit for corporate groups. This will not seriously affect government's revenue mobilization effort. If society does not honestly fund political activity, dishonest funding will drive politics into the hands of criminal gangs and corrupt elements.

The second issue is transparency. How much a party or a candidate receives from whom, and what is offered in return are of vital importance to the public. Secret contributions, back room deals and illegitimate expenditure distort the electoral process, affect governmental decisions, compromise public interest and undermine competition. Therefore every rupee collected and spent should be fully disclosed. Given the current state of law enforcement, there should be severe penalties for non-disclosure or false disclosure, drastically increasing the risks of secret funding. The donor should pay fine equal to ten times the amount and imprisonment. The recipient should face fine, unseating, disqualification, imprisonment, and in case of parties de-recognition for a limited time. Only when there is a definite, though small, risk of severe punishment can we enforce compliance of transparency law. Otherwise we will have one more statute contemptuously ignored. All accounts should be fully audited and made public. The Election Commission should be the final authority for determination of non-compliance and imposing all penalties except imprisonment. Much of our discourse has been hitherto focused on limits on expenditure, but the real issues are honest funding and transparency.

Finally we should look at public funding of elections, but only after transparency and internal democracy in parties are in place. The party candidates should be chosen democratically by the constituency members, or their elected delegates. Once open and accountable funding and party democracy are enforced, we should consider public funding. Electoral contest is not for private gain, but it is a public activity. It is inimical to democracy and good governance if only individuals who can spend large sums of personal wealth or private contributions have a realistic chance of being elected. Public funding is necessary to encourage the best and brightest to contest and promote integrity in public life. Sensible public funding should fulfil certain conditions: it should be objective and non-discretionary; there should be a transparent and verifiable mechanism; the electoral rolls should be cleansed in advance and rigging should be stopped; it should not impose excessive burden on the exchequer. Public funding can be indirect and direct. Indirect funding in the form of free radio and television time is now available to parties on government channels. This should be extended to private channels, and it can be a licensing condition. There should be flexibility in use of time to make communication effective, attractive and to promote informed discourse. Live debates among leading contenders is one effective technique successful in many countries. Direct funding will be most practical, fair and simple if the candidates or parties are given a fixed amount of about Rs 10 for every vote obtained in the constituency, subject to crossing a threshold of, say 10% of the valid votes polled. Then all candidates will have a fair chance and entrenched parties will have no monopoly; funding will be objective and based on popular support; and non-serious candidates will not get any funding. Recognised parties could receive 50% of the funding in advance based on previous elections, and the balance based on their entitlement according to the votes received in the election. Such elegant and practical methods can be evolved. What is more, the cost to the exchequer will be marginal. An estimated 55% of the population, or about 56 crore people are voters. Usually about 60 - 65% of votes are cast in elections. For 33 crore votes cast, the fund required will be Rs 330 crores for Lok Sabha election and equal amount for State Assemblies. In a cycle of 5 years, a total fund of Rs 660 crores will be required for public funding of national and state elections - which is roughly a third of the public expenditure every day in India!

The decision of the Congress Party needs to be supported and encouraged by all right thinking citizens. Public opinion will goad other parties into action soon. We need to resolutely and quickly address the issues of political and electoral funding in order to cleanse elections, promote healthy politics, encourage the best to contest, ensure true competition in the economy, restore integrity in public life and safeguard our democracy. Too much is at stake for us to pretend that the issue does not concern thinking citizens and wealth creators.

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