Lack of limits on individual donations and underreporting of election expenses are reasons for low ranking says Global Integrity Report.
Corruption report rates India low on political financing
NEW DELHI // India is again among the lowest-rated countries for political finance regulation, according to the latest report from an organisation that monitors governance and corruption levels around the world.
The 2011 edition of the Global Integrity Report, released Friday by the non-profit Washington-based Global Integrity, surveyed 31 countries in Europe, the Americas, Asia and Africa.
India rated below Liberia, Tajikistan and Indonesia in the transparency of its political financing, scoring 28 out of 100. India scored 27 in 2009, when the organisation last surveyed the country. In comparison, the United States rated 74.
"There are no limits to individual donations, and corporate donations are hardly ever questioned because elections expenses are grossly underreported," the report said in comments about India's political finance accountability.
Corruption scandals have dominated India's ruling Congress party, with senior government ministers and officials facing charges over $4 billion (Dh14bn) that disappeared during the 2010 Commonwealth Games, and a cellphone licensing scandal that cost the government up to $36bn in lost revenue.
Anil Bairwal, the national convener of the New Delhi-based Associated for Democratic Reform, agreed with the report's findings that candidates are likely to exceed the legal limits for election expenses, and fail to report all they spent.
In a round of state elections this year, for instance, the Election Commission referred nearly US$6.5 million to the income tax authorities in the state of Punjab. In Uttar Pradesh, another $5.6m was seized and referred to tax officials.
The seizures happened despite a day-long workshop on campaign financing held ahead of the polls, at which India's chief election commissioner, SY Quraishi, promised to "come down heavily against black money".
In 2010, India's election commission created an monitoring division to check the flow of illegal campaign funds.
"(It) has actually done a wonderful job, if you look at how much money has been seized in recent elections," Mr Bairwal said. "But the political parties aren't doing what they're supposed to, and they continue to field candidates who are moneybags."
The Global Integrity report has also noted that Indian law does not mandate public disclosures of donations to political parties or audits of party finances. There are no limits to an individual's donations to political parties, although corporate donations are held to five per cent of a company's annual net profits.
These donations too, however, are said to be underreported.
Mohit Satyanand, a New Delhi-based investment analyst and management consultant, said that small companies don't want their donation on the record, as they risk harassment if the rival party wins power.
"So as a company, I'm much safer not making a donation to any of them in a public manner, and just making a donation in cash at the local level to the party, which won't appear on the books," Mr Satyanand said.
He said the 'quid pro quo" campaign funding occurred at every level of Indian politics. "If I were a candidate, a contractor would make a cash donation and, if I get elected, I would award him contracts to build a new bus shelter or whatever."