Where’s the Money?: Paths and Pathologies of the Law of Party Funding

Abstract

With an electoral competition involving around 902 million votes, 8049 candidates and more than 2200 registered parties, it is only obvious to expect that Indian General Election would be a staggeringly expensive affair. The 2019 Indian General election was no different. According to some measures, it was the costliest election in democratic world, with total amount spent being close to ₹ 6 Trillion. Indian electoral democracy, despite its acclaimed successes, faces a serious challenge in the form of its party funding regime. Party funding reform, however, is one of the most difficult to accomplish. Apart from technical complexities involved, it requires the politicians to regulate themselves – a classic case of a fox guarding the hen house. However, despite its complexities and importance to democratic governance, party funding has received scant attention in Indian legal scholarship. In India, party funding is regulated through a complex but disparate set of corporate, election and taxation laws. The article is divided into four parts. The first two parts will deal with two different axes of party funding regime in India – (a) corporate contributors: who can contribute funds to political parties? and (b) disclosures: what, if any, information about these transactions should be disclosed, and to whom should disclosures be made? Party funding reforms have been limited by entrenched practices, culture and political economy that are effects, as well as causes, of the path that party funding regime has traversed in India. I will further analyse the constitutionality of electoral bonds and other laws that facilitate party funding opacity, and will end with a cautionary note: if other elements of party funding law – such as disclosure threshold and cash donations – are left intact, merely doing away with electoral bonds may be far from fixing party finance.

Keywords: Political Parties, Campaign Finance, Political Funding, Right to Information, Informed Vote, Anonymity, Disclosures, Electoral Bonds