Op-Ed: Election Reforms - The Hindu (07.03.18)

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It is time to have a debate on proportional representation, says ex-CEC S.Y. Quraishi (07.03.18) An Interview

The former Chief Election Commissioner on the problem with electoral bonds, the unnecessary controversy over EVMs, and electoral reforms needed

Various electoral reforms are currently being debated, from improving transparency in party funding to holding simultaneous elections. In a wide-ranging conversation, former Chief Election Commissioner (2010 to 2012) S.Y. Quraishi addresses these issues. He also talks about, among other things, the challenge posed by electoral bonds, the concerns over the tampering of electronic voting machines (EVMs), and the problems with the first-past-the-post system.

Excerpts:

Electoral bonds, as announced by the Union Finance Minister, hold the promise of making political funding transparent, which has been a long-standing demand of the Election Commission (EC). Do you think electoral bonds are the solution?

When the Finance Minister began his Budget speech, he said without transparency in political funding, free and fair elections are not possible. This was music to my ears. But what he offered was just the opposite. So far, all donations above ₹20,000 were disclosed to the EC. It is, of course, a different matter that political parties accept donations in crores and convert them into cheques of ₹20,000 — and this is more than 75% of all collection of political parties where sources are unknown. Now, with electoral bonds, 100% source will be unknown. The government has decided to give precedence to the donors’ wish to be anonymous. There was a CII (Confederation of Indian Industry) report of 2015 which said that donors want anonymity for two reasons: one, other parties would make a beeline for their donations, and two, fear of political reprisal from those not getting the donation. The real reason probably was that they don’t want the quid pro quo to get known. Finally, the donors’ desire for transparency has got preference over citizens’ desire for transparency and the people’s right to know, which is more important in a democracy and critical for the fairness of elections.

I must add, however, that there is one good thing about electoral bonds: cash transactions will not happen as people will have to buy bonds through the bank.

The government, and not the public or even the EC, would know who is giving what, right?

Yes, absolutely. And it is the government which can harass the donor more than any political party out of power. Reprisal, if any, can come only from the government. The government has empowered itself to know exactly who is giving what to whom. This is not what we in the EC were expecting and striving for.

Is the removal of the 7.5% cap (based on profits over three years) on corporate donations a good idea?

Not at all. The cap existed for a good reason — that the companies should not start influencing political processes. Now companies can exist just to run India’s politics. That is what crony capitalism is, and now it has been legalised. Billionaire-run companies will run Indian politics. The government has created a Frankenstein’s monster for itself. Nobody is in power permanently. Therefore, instead of thinking of long-term national interest, short-term political interest has been given precedence.

Has there been any reprisal against a donor in the past?

The solution lies in having a National Electoral Fund, where companies can donate without indicating preference for any political party and thereby avoiding the reprisal they claim to fear. The fund can be distributed transparently on the basis of actual performance. I have given a formulation: for every vote cast in favour of a candidate, ₹100 can be given. If 55 crore people cast their votes, the National Electoral Fund distributes ₹5,500 crore among parties/ candidates.

Will that money be enough for political parties?

I would say more than enough. The basis of my argument is that between 2009 and 2014, the total donation shown by all political parties was ₹4,000 crore. With all their efforts at blackmailing, arm-twisting and corruption, they got ₹4,000 crore. Here they get ₹5,500 crore with dignity, by cheque, based on their performance, on objective criteria. And this is one figure which cannot be fudged. All political parties have been demanding an end to electoral corruption, and state funding of elections. We are opposing state funding of elections as that will be impossible to monitor, and suggesting state funding of political parties, [which is] easy to monitor. There will be no scope for fly-by-night political parties. They will have to first perform in an election before they receive any funds.

What do you think about simultaneous elections, an idea which has been mooted by the Prime Minister?

It is a desirable idea. It has many advantages, some of which were listed by the Prime Minister. And they mainly have to with the huge costs and dislocation of normal life. I add two more. Money in elections is the fountainhead of all corruption. If you are always in election mode, you are always in corruption mode. Secondly, communalism and casteism are at a peak during elections. Hateful, divisive politics is the consequence of frequent elections.

The arguments in favour of staggered elections are equally strong. What do people want? As a Biju Janata Dal MP once remarked, people love elections as the vote is the only power they have. Secondly, election time provides work opportunities to lakhs of youth. At a recent Chhatra Sansad in Pune, I heard this interesting remark from a young girl from Chhattisgarh: “Jab jab chunav aata hai, garib ke pet mein pulav aata hai (Whenever the elections come, the poor get some food).” Thus, in a way, frequent elections are good for the economy as the money goes from the rich to the poor. Thirdly, national and local issues don’t get mixed up.

Interestingly, initially the Prime Minister had mentioned that there should be simultaneous elections at all three levels. Somewhere down the line, the third tier has disappeared from the debate. So, you have already compromised on one-third of the suggested reform. Of the remaining two-thirds, half has been sacrificed by the suggestion of the Parliamentary Standing Committee and Niti Aayog that if it is not feasible to hold elections once in five years, let there be two in five years!

Fourthly, let’s not forget that India is a federal country. Regional parties have an increasingly important role to play. If they feel threatened by the proposal, they are bound to oppose it, making consensus impossible.

In a scenario where 29 State governments have come to power with absolute majority, if at the Centre the government falls, why should the States suffer? Of course, the anti-defection law is there to discourage this to a considerable extent. But in an era of coalition governments, there is always the possibility of governments falling, when a partner chooses to leave.

You had mentioned in an essay that it is time to review the first-past-the post system (FPTP)? Has the demand for replacing FPTP with proportional representation (PR) become louder after the 2014 general elections?

When I wrote An Undocumented Wonder: The Making of the Great Indian Election, which came out in the middle of the elections of 2014, I had written that FPTP was the best system for its simplicity. I had also discussed various PR systems but dismissed them as not being practical for India. After the 2014 elections, I felt compelled to change my position when we saw that even with the third largest vote share of 20%, one party (the Bahujan Samaj Party) got zero seats. This is not democracy. I think it is time to have a national debate on this. We could look at the German model where they have a mixed system — half PR and half FPTP.

Doesn’t PR carry the threat of further dividing our society on caste, religious and other lines? When parties are promised seats in proportion to their votes, don’t you think politicians will find innovative ways means of forming newer parties?

No way. In fact, it may make the competitive, no-holds-barred politics of today less bitter as the parties will hope to have their presence in the legislatures according to their vote share instead of being wiped out completely even after getting a sizeable vote share.

There is a debate on EVMs. Should we go back to paper ballots?

Certainly not. Our EVMs have stood the test of time. Every, I repeat, every political party has raised questions about EVMs at different times. And when with the same machines they come to power, they go silent.

In any case, after introduction of voter verifiable paper audit trail (VVPAT), there is no ground left to quibble. VVPAT makes the system transparent and foolproof.

The EC said that at least 25% of the booths in a constituency should have VVPATs. But ground reports suggest otherwise.

That must be old hat. The EC has now committed to the Supreme Court that every election in future would be with 100% VVPAT. The Gujarat and Himachal Pradesh elections were the first-ever full VVPAT elections. The dispute now is, how many machines would be counted for voter chits countercheck. The EC has said one booth per constituency. There are 200-300 polling booths per constituency. One is certainly too little for the purpose it was introduced. Let the EC discuss it at an all-party meeting to arrive at a consensus.

Has the credibility of the EC taken a hit?

In the context of CEC Achal Kumar Jyoti’s decision on Gujarat election dates, you mean? But the same Mr. Jyoti was applauded for his verdict in the Gujarat Rajya Sabha elections. The problem lies in the process of appointment of Election Commissioners. They are appointed by the government of the day with no consultation with the Opposition. The controversy was unfair to Mr. Jyoti just because he was from Gujarat. We should have a collegium to appoint the CEC. When we can have a collegium system for the CVC (Central Vigilance Commissioner) and the CIC (Central Information Commissioner), which are not even constitutional bodies, why can’t we have one for the most critical constitutional body, the EC? The most powerful electoral body in the world has the most defective system of appointment. This reform cannot wait.

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Older Op-Eds

A vote for state funding (29.01.18)

Indian elections are the world’s biggest exercise in democracy but also among the most expensive. India’s campaign spend is only rivalled by the American presidential race, the world’s most expensive election. Parties and candidates need large sums of money for voter mobilisation, advertising, consulting, transport, propaganda and printing of campaign materials to reach voters in constituencies. Corporate donations constitute the main source of election funding in India which is awash with black money, with business and corporate donations to political parties commonly taking this form. The public disclosure system that exists is limited. Only in 2008, using the provisions of the Right to Information (RTI) Act, the Central Information Commission allowed disclosure of income tax returns of political parties, though it is an open secret that actual expenditure is much, much higher than what is disclosed.

Best practices elsewhere

India’s privately funded election campaign stands in contrast to the trend in most countries, which have partial or full public funding or transparent regulation and financial accountability of political finance as in the U.S. Corruption in election finance and the flawed party funding system drive political parties to misuse government’s discretionary powers to raise funds for election campaigns. The combined effect is the absence of a level playing field which has reduced the effectiveness of our democracy.

In his 2017 Budget speech, while emphasising the absence of transparency in funding, Finance Minister Arun Jaitley noted that even 70 years after Independence the country had not been able to evolve a transparent method of funding political parties which is vital to the system of free and fair elections. But the concern for transparency in political funding is at complete odds with the electoral bonds scheme notified by the government this month to clean election finance. Simply put, anybody can buy electoral bonds in the form of bearer bonds from specified branches of the State Bank of India and donate it anonymously to a political party of their choice; the party must cash the bonds within 14 days. All donations given to a party will be accounted for in the balance sheets but without exposing the donor details to the public. Donors continue to prize anonymity as they fear disclosure could invite adverse consequences from political opponents. As a result, the Election Commission (EC), the Income Tax department and the voter would remain in the dark about it. However, the ruling dispensation at the Centre, if it wants, can ferret out information on who’s funding whom from banking authorities on some pretext or the other.

The most significant aspect of the electoral bonds scheme is that it will not carry the name of the payee as there is reluctance to donate to parties through bank instruments citing loss of anonymity. Bonds will allow corporate houses to make anonymous donations through banking channels to the party of their choice. This would lead to further opacity in the funding process and further limit oversight and accountability. Transparency is a global norm while opacity of election funding is an area of existential concern for democracies. Subversion that such anonymity affords is perhaps one of the biggest threats to our democracy today; it is the very wellspring of institutionalised corruption.

Far from reducing the large-scale corporate funding of elections, the introduction of electoral bonds does not even address this issue. The government’s principal aim is to reduce the role of unaccounted cash in the electoral process and not the corporate control of politics. Sure enough, the bonds scheme imposes no restrictions on the quantum of corporate donations. Consequently, electoral bonds cannot address the problems that arise from the corporate control over politics and corporate capture of government policies and decisions. Rather, electoral bonds will result in unlimited and undeclared funds going to certain political parties which will be shielded from public scrutiny as the balance sheets will not show which party has been the beneficiary of this largesse.

Three steps back

Electoral bonds must be seen in conjunction with: (1) lifting of the maximum limit of 7.5% on the proportion of the profits a company can donate to a political party, thus opening up the possibility of shell companies being set up specifically to fund parties; (2) amendment of the Foreign Contribution (Regulation) Act (FCRA) opening the floodgates of foreign funding to political parties, especially those which have a foreign support base; and (3) the refusal of political parties to come under the RTI Act in order to conceal their sources of funding. These three things will end up strengthening the business-politics nexus. It goes against the position taken by various electoral reform committees that the existing pattern of political funding encourages lobbying and capture of the government by big donors. Far from making the funding process transparent, the bond scheme could provide a backdoor to corporates and other lobbies for shaping public policy to benefit their interests. There is thus a legitimate fear that policy decisions of political parties and politicians after being elected may be biased in favour of groups that fund them.

Moreover, these bonds are likely to reverse the small steps towards transparency of political finance that came as a result of RTI-driven public disclosure of income tax returns of political parties arguing that these disclosures were a matter of public interest and should be available to citizens. Furthermore, all registered parties were required to disclose to the EC the identity of individuals and private entities donating more than ₹20,000 every year. Proposed amendments to the Income Tax Act and the Reserve Bank of India (RBI) Act will exempt parties from keeping records of donations made through bonds. However, the decision to reduce cash contributions from ₹20,000 to ₹2,000 is a step in the right direction, but the net effect is debatable, since it could prompt parties to take smaller cash donations, and therefore not declare their source. This would not decrease the drift towards non-transparent funding reported by the Association for Democratic Reforms which found that nearly 70% of party funding over an 11-year period came from unknown sources; nearly ₹7,900 crore donations came from unknown sources in 2015-2016. Electoral bonds will not change this. In fact, political parties don’t need to reveal the donor’s name for a contributions above ₹20,000 provided these are in the form of electoral bonds.

Elections that work well are essential for democracy; conversely, money power can corrode the entire process. A major concern associated with the high cost of elections is that it prevents political parties and candidates with modest financial resources from being competitive in elections. Whilst the bond scheme can be an attempt to burnish the anti-corruption credentials of the Narendra Modi government ahead of the 2019 general election, it is clearly a regressive and flawed move. A number of government committees have outlined reform proposals to contain the negative effects of the high cost of elections. These include strong disclosure norms, strict statutory limits on election expenses and ceiling on corporate donations to political parties. The rules to limit and restrict the campaign expenditure of parties are largely inoperative because it is easy to circumvent them.

Staring at the solution

State funding of elections (in various forms) is a potential solution to this problem. The Indrajit Gupta Committee on State Funding of Elections had endorsed partial state funding of recognised political parties and their candidates in elections way back in 1998, but the lack of political will has prevented any serious discussion on this. The mechanics of this process need to be carefully worked out to establish the allocation of money to national parties, State parties and independent candidates, and to check candidate’s own expenditure over and above that which is provided by the state. Based on the experience of countries that have total or partial state funding of elections, it will not be difficult to work out a formula that is both efficient and equitable to ensure that democracy works for everyone and not just for the wealthy few.

Zoya Hasan is Professor Emerita, Centre for Political Studies, Jawaharlal Nehru University

Directing reforms: on candidates disclosing sources of income (19.03.18)

It is only logical that the sources of income of candidates be disclosed

Adding to the growing body of judicially inspired electoral reforms, the Supreme Court has imposed an additional disclosure norm for candidates contesting elections. It has asked the Centre to amend the rules as well as the disclosure form filed by candidates along with their nomination papers, to include the sources of their income, and those of their spouses and dependants. The court has also asked for the establishment of a permanent mechanism to investigate any unexplained or disproportionate increase in the assets of legislators during their tenure. The verdict of the two-judge Bench on a petition from the NGO, Lok Prahari, is one more in a long line of significant verdicts aimed at preserving the purity of the electoral process. These include the direction to provide the ‘NOTA’ option in voting machines, and another striking down a clause that saved sitting legislators from immediate disqualification upon conviction. It has ruled that the act of voting is an expression of free speech, and that it is part of this fundamental right that voters are required to be informed of all relevant details about a contestant. This led to the rule that candidates should furnish details of any criminal antecedents, educational qualifications and assets. If disclosure of assets is mandatory, it is only logical that the sources of income are also revealed. And as it is often seen that there is a dramatic increase in the assets of candidates at every election over what was disclosed in previous affidavits, it stands to reason that any rise should be explained or probed.

Few will dispute that lawmakers amassing wealth or gaining unusual access to public funds and loans are concerns that need to be addressed through new norms. To give teeth to its order, the court has made it clear that non-disclosure of assets and their sources would amount to a “corrupt practice” under Section 123 of the Representation of the People Act, 1951. Lest a question be raised whether the court’s order to amend the relevant rules amounted to legislation, the Bench has said it sees no “legal or normative impediment”, as the Centre is empowered by the Act to frame rules in consultation with the ElectionCommission. The idea of a permanent mechanism to collect data about the assets of legislators and periodically examine them is laudable, but it is not clear which authority will run it. The court envisions a body that would make recommendations for prosecution or disqualification based on its own findings. The Centre and the Election Commission will have to jointly address the issue. The larger message from the verdict is that a fully informed electorate and transparent candidature will be key components of future elections in India.

For cleaner, fairer elections (21.02.18)

Removing opacity in party funding and campaign finance is still a work in progress

Electoral reforms in the hands of politicians is a classic example of a fox guarding the henhouse. While there are many policies that both major parties disagree with each other on, they form a remarkable tag team when it comes to electoral reforms. Unsurprisingly, the Supreme Court, over the last few decades, has readily stepped in to introduce electoral reforms. However, most of these interventions are directed at candidates, and rarely at the parties. The Supreme Court’s recent decision on information disclosure (Lok Prahari v. Union of India) paves a way for future constitutional interventions in India’s party funding regime, including the scheme of electoral bonds.

An extension

In 2002, the Supreme Court, in a landmark decision in Association for Democratic Reforms v. Union of India (ADR), mandated the disclosure of information relating to criminal antecedents, educational qualification, and personal assets of a candidate contesting elections. Sixteen years later, the court has extended the disclosure obligation to further include information relating to sources of income of candidates and their “associates”, and government contracts where candidates or their associates have direct or indirect interests.

The principled basis of the court’s decision is that voters’ right to know about their candidate is an extension of their freedom of expression; voters cannot be said to have freely expressed themselves (by voting) without having appropriate information about the candidates. They should have the opportunity of receiving relevant information “to make an appropriate choice of his representative in the Legislature”. What Lok Prahari does is that it extends the ADR decision to include information about the candidate’s “associates”; relevant information for voters is no more limited to the candidate’s personal information. What does this decision tell us about party funding?

If there is one piece of information that a voter is most deprived of in India, it is that about party funding. While the scheme of electoral bonds has received much attention, another significant facilitator of opacity is an obscure, yet significant provision of the Representation of the People Act, 1951: Section 29C(1)(a). The provision exempts political parties from disclosing the source of any contribution below ₹20,000. This gives political parties a convenient loophole to hide their funding sources by breaking contributions into smaller sums, even ₹19,999 each. As a result, a vast majority of donations to political parties come from sources unknown to voters. The new scheme of electoral bonds takes away even the facade of disclosure requirements that used to exist in earlier law.

Is the information about party funding relevant for a voter in choosing a candidate? Upholding the constitutionality of disclosure requirements for funding sources in Buckley v. Valeo, the U.S. Supreme Court held, “The sources of a candidate’s financial support also alert the voter to the interests to which a candidate is most likely to be responsive.” Therefore, it is essential for voters to know the funding sources of their candidates. Parties in India play at least two crucial roles in the election of candidates, namely financial support to candidates, and, more importantly, setting the agenda. Not much needs to be said about direct and indirect ways in which parties financially support their candidates.

Another point for disclosure

However, even if one assumes that parties do not fund their candidates, there is another rationale for disclosure of party-funding sources. Parties occupy a special space in India when it comes to agenda setting. By virtue of a strong anti-defection law in India, all elected legislators are bound by their party agenda. If an elected legislator refuses to toe the party line, she can be disqualified. In Kihoto Hollohan v. Zachillhu And Others, the Supreme Court, upholding the anti-defection amendment, noted: “A person who gets elected as a candidate set up by a political party is so elected on the basis of the programme of that political party.” Parties cannot lay claim to the representation of a candidate, and at the same time argue that information about party funding is not relevant for voters. In short, you cannot have your cake and eat it too.

As a matter of policy, one may argue that strict transparency norms may not always be desirable. However, as a matter of legal principle, the court’s recent judgment in Lok Prahari, read along with our constitutional structure, strikes a blow against the provisions discouraging transparency in party funding. If the court’s jurisprudence is consistently applied, the scheme of electoral bonds could be declared unconstitutional.

(All of the above articles have been taken straight from The Hindu. We owe it all to them. This is just an effort to consolidate opinions expressed in The Hindu in a subject-wise manner.)