BJP favours unlimited, anonymous donation to parties

The original provision in the Companies Act, Article 154 of the Companies Act, had three elements to it in respect of political funding.

• No company can contribute politically to any particular party unless that company has been in operation for three years.
• The amount of funding was capped at 7.5% of the net profits that company has made in the last three years with reference to the year in which the funding takes place.
• The funding had to be done through a Board resolution and the name of the political party and the acceptance of that political party of the funding were reflected in the Board resolution.

Now what has this Government done? It really surprises me that for someone who waxes eloquent about transparency and black money, this Government has actually done away with the cap. In other words, any company can contribute any amount of money to any political party.

But that is not all. What it has done away is the fact that the political party that the company will fund will not be known to anybody.

This is what the provision says, “every company shall disclose in its Profit and Loss account, the total amount contributed by it under this section during the financial year to which the accounts relate.” That is all. Which party it is going to, nobody will know.

Even the shareholders will not know because it will be reflected in the Profit and Loss account. If it is reflected in the Profit and Loss account, the name of the party will not be reflected there and only the amount will be reflected. So, this is the surest way to ensure that the political party in power gets all the funding that it needs.

This is not limited only to Lok Sabha elections. It will apply to State elections. It will apply to local body elections and you can imagine the kind of havoc that it will cause.

Companies who are crying for contracts, companies against whom proceedings are going to take place, companies who are financially in bad shape, companies where restructuring is going to be done will be asked to pay money into the kitty of a political party without the name being disclosed and there would be financial havoc.

Ultimately, even the shareholder cannot ask any question because he doesn’t know. He doesn’t know the amount of money that has been funded. He doesn’t know which political party and assuming the shareholders are against that party, how will they ever know?

How has the Government done this through the Finance Act? This is a pure amendment to the Company’s Act. What has it got to do with the Money Bill?

The Government should have initiated the amendment either in the Lok Sabha or in the Rajya Sabha. The House would have sent it to the Standing Committee. The Standing Committee would have weighed the pros and cons of it, whether it is acceptable to the people of this country or not, and you surreptitiously, through the back door, at the last minute, move an amendment, and on the morning of March 22, when the Bill is to be taken up in the other House, people don’t even know what the amendment is and after they have finished their speeches they realise that this is the amendment. So, they can’t raise a voice there. They can’t raise a voice here because we have no voice. It is a Finance Bill. So, we cannot object.

Is this the way to function when you are talking about embracing transparency and accountability?

Kapil Sibal* is a Congress Rajya Sabha MP and former Union Minister. He tweets at @KapilSibal

*Based on the MP’s intervention in the Rajya Sabha during the debate on the Finance Bill