Friday , 26 April 2019

Need For Financial Transparency

Binayak Datta

Sidney Carton in his last words in Dickens’ “A Tale of Two Cities” says in optimism to the girl who entreats him to hold her even for a moment, before they go to the guillotine,  ….. “I see a beautiful city and a brilliant people rising from this abyss, and in their struggles to be truly free, in their triumphs and defeats, through long years to come, I see the evil of this time and of the previous time of which this is the natural birth, gradually making expiation for itself and wearing out”..

The Finance Bill 2018 along with 218 amendments and grants were passed in just 30 minutes on the 13th last, without any debates. Debates which normally take 3 to 4 hours at least and then a vote, often through divisions, demand-wise.

Two hundred and forty years ago, Parisians saw thousands of citizens going to the guillotine – this time Indians saw 218 Amendments and Demands in the Finance Bill intended to vote expenditure 24trillion rupees of their hard earned money, going to the our modern-day “guillotine” (a term used for clubbing of all matters and passing them one shot in a bunch without discussions in the Parliament), a record of sorts in the history of Independent India. Whilst there was continued ruckus in the Parliament for the Bank Scam – amidst the now seemingly well-orchestrated din, the ruling side quietly passed the Finance Bill and all of the amendments. There was enough time (till April 6) though, for a decent debate.

The optimist that I am, a staunch reader of Dickens – even I, had to sit back and wonder about the brazen act which honestly, perplexed me to no end! The act itself was no surprise – the brazenness was!

Well, the 4 major things that were passed along with the bill were: 1) Controversial foreign funding to political parties, which will allow them to escape scrutiny with retrospective effect for 42 years; 2) Salary hikes for the President, MPs and State Governors; 3). An Appropriation Bill which allows govt to draw Rs 80,000 crore from the Consolidated Fund of India and 4) A long-term capital gains tax, which evoked tremendous wrath from tax payers since it was announced in February. Investors will now have to pay 10 per cent tax on profits from shares sold, even if they have had these shares for more than a year.

But I say, if not for anything else – is it fair to pass the proposals of remunerations of the President and the MPs of the Republic without a whiff of a discussion at least? What sort of decency do our representatives maintain in Parliament? But I’m happy not to further talk of decency and decorum in public spaces here!

That said, let me come back to the issue of the controversial foreign funding to political parties, which will allow them to escape scrutiny with retrospective effect for 42 years of Political Funding. First the story in a nutshell in lay language: There used to be a good old law from 1976, re-enacted in 2010, called the Foreign Contribution Regulations Act (FCRA) which sought to regulate foreign contributions to Political Parties, NGOs. Back in 2014 the Delhi High Court ordered that both BJP and the Congress had violated the FCRA when they both received crore of rupees of donations from foreign subsidiaries of large Indian Groups and Swiss Origin Companies from 2004-05 till 2009-10.

The High Court had observed, “Political Parties and pliant public functionaries were influenced by foreign powers to toe their lines and in return were handsomely rewarded in myriad forms, which included bribes, extending lavish hospitality, sponsorship of education of their relatives in reputed Universities abroad and even securing attractive career opportunities in Multi-National Corporations,” nothing in my view, could be of greater shame to any organisation, coming as it did from a High Court! In a super solidarity – both the BJP and Congress together went in appeal to the Supreme Court to somehow ward off punishments.

Then in 2016, again through a Finance Bill the “definition” of a foreign donor itself was changed so that the noble benefactors and their noble beneficiaries were now as innocent as doves. The 2 parties-in-arms went and withdrew their appeal since at last they were “safe”. But an inch of a doubt still lurked…. whether the crore received before 2010, that is  those between 2004 and 2010 could someday come back to haunt them – since the old FCRA was alive from 1976 till 2010. So now – “No-Head-No-Head-Ache!,” in one stroke in 30 minutes the ruling party just painted white, all the crore of foreign donations they received ever. Thats it all. What a spectacular bonhomie between these two sworn adversaries (in public)!

My take: 1) Although the new amendment will probably be challenged in the Supreme Court – the future of such a petition itself may be doubtful, since no other than four senior-most judges themselves of the same court claim opacity in roster managements. 2) For data share of caste surveys with a foreign company – the hell is let loose today – what if a foreign company from say China or Pakistan “invests” a couple of Billions in an Indian Political Party tomorrow who unfortunately with that money win the elections (with appropriate sops) and form a government – will it still be a free lunch for the parties? 3) Just for an order of the magnitude, the Election Commission data shows the tremendous increase in corporate donations to political parties. In the last 3 years these donations added upto a staggering Rs 956 crore – up 2.5 times of the 7 years preceding! Is this where then, our democracy will go?

And in conclusion: It’s futile talking of “reforms” – frankly there can be NO reforms unless you first have electoral reforms followed by juridical reforms and finally administrative reforms. But I am fairly positive, in Dickens’ words..of… a beautiful city and a brilliant people rising from today’s disquieting milieu!


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