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  • Union Budget 2018-19 Updates- No Provision for Political Party Funding

    Being the last full budget of the present government before the 2019 General Elections, the Union Budget 2018-19 holds vast significance. While the financial sector was predicting a potent growth-oriented budget giving way to several financial reforms, other sectors such as political party funding system were also expected to be introduced to some big changes. Especially, after the big political funding reform of the Modi government in Union Budget 2017-18, this recently announced budget was hoped to bring in new proposals for better implementation of the changes proposed in the previous budget.

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    Union Budget 2018-19 Update- No Provision for Funding Political Party

    Under Section 14A of the Political Parties and Organisation Act, 2015 government needs to contribute some amount to the party fund in every budget. As per the law, funds are required to be allocated only to the party representing in the parliament. However, due to heavy pressure, the government has started allocating funds to various political parties represented in parliament since FY 2014-15.

    In a statement a few days back, the EC specified that there are other vital areas like voter education, relocation of Commission Headquarter etc. which are operating without government funding and need urgent monetary attention. So, they are not in a position to provide funding to the political parties in the new Union Budget.

    Standing true to the statement of the Election Commission of India, the Union Budget 2018-19 doesn’t have any provision for funding any of the political parties. Since all the parties have to manage their own funding from other authorised sources for the current fiscal, the ruling party might face stiff protest from the opposition due to the materialisation of this non-funding decision.

    Union Budget 2018-19- Political Party Funding Expectations

    • While the political funding reforms initiated in Union Budget 2017-2018 had kick-started the reformation process in India, there are multiple caveats. The changes proposed by the Modi Government to eradicate the evils of non-transparent political funding are anticipated to have limited impact in correcting the infirmity. Hence, the Union Budget 2018-19 was expected to come up with new amendments in the previous year’s reforms to deal with the political funding infirmity in India in a better way.
    • The new rules have several loopholes that are required to be addressed for better implementation. While the previous budget has ended the provision of cash donations, it has entitled the parties to receive donations through cheque or digital mode. Since this new rule has not made it mandatory for the parties to accept digital payment they still have the advantage of accepting payments in cash. As per expectations, the government was supposed to consider this in the new budget.
    • Though the budget of 2017-18 facilitated political party contributions through authorised banking channels, the identity of the contributor will still remain hidden from the public and thus it is no way enabling the public to know the true sources of the party funds. The new budget was hence expected to come up with certain amendments in this scheme.
    • It has been a long demand to bring political party funding under the RTI Act. But, it was opposed by all majority parties in the Parliament on the grounds that it might trigger instability and disturb the functioning of the political parties. Recently, the Supreme Court has also turned down the plea to introduce a law mandating the political parties to declare their source of funds. Hence, speculations were rife that in the new budget the government might take some initiative in this aspect.

    As a matter of fact, the expectations of the parties as well as the public has not been met as political party funding is not in the agenda list of the Union Budget 2018-19. Therefore, the party, as well as the public, have to wait for one more year for their expectations to get materialised.

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