In India, Campaign Contributions Paid in Cash

By Venus Upadhayaya, Epoch Times
October 1, 2013 Last Updated: October 1, 2013

BANGALORE, India—As India grapples with an amendment to its Right to Information Act that would make political parties exempt from transparency, citizens ought to be concerned according to the Association for Democratic Reforms (ADR). The government accountability NGO, found that in India 75 percent of political party funds are from “unknown” sources.

The ADR analyzed the funds collected by national political parties during 31 elections from 2008 to 2012.

The ADR study shows that over 90.38 percent of donations worth $40 million to India’s ruling party, the India National Congress, were made in cash.

“Citizens should be concerned because when the source of funding to political parties is a secret, donors usually demand favor from the political parties,” said Trilochan Sastry, chairman of the ADR and founding member of the National Election Watch.

Banks keep records of donations given by check or bank demand draft, but cash donations cannot be traced and even more so when donations are less than 20,000 rupees ($320).

In India, political contributions under 20,000 rupees are not required by law to have receipts.

Political parties are taking advantage of that law. “In India, any money transaction above 10,000 rupees ($160) shouldn’t be given in cash. [We] can’t have two sets of standards, one for public and another for political parties,” Sastry said. “Leading democracies cannot allow money donations [to political parties] like this,” he added.

Mining Connected to Corruption

Illegal mining has become a national scandal in India whereby, among other scams, powerful mining bosses like, Janardhana Reddy and his brother, Karunakara Reddy, (aka the Reddy brothers) were incarcerated on charges of running a mining mafia fueled by rising demand for iron-ore in India and China.

“Take for example the mining thing happening in Karnataka. They donate lots of money and then compel the government to make policies in their favor; they misuse the resources and pollute the environment,” Sastry said.

The Reddy brothers allegedly gave huge donations to the then ruling party in Karnataka state and the current opposition party at the state and the national level, the Bhartiya Janta Party (BJP).

The Reddy brothers also served as ministers in the state BJP government. After an investigation by the Central Bureau of Investigations they were arrested and indicted in a huge scandal, which also led to their removal from their government positions. Subsequently, they left the party and shifted their political affiliations that ultimately lead to BJP’s defeat in the recent state elections.