The Big Story: Frosted glass

Finance Minister Arun Jaitley, in his annual Budget speech on Wednesday, featured an unusual section: Transparency in political funding. Jaitley mentioned six measures and insisted that his government was committed to cleaning up political funding.

The intention is certainly laudable. Most Indians would say political corruption is a major source of black money in the country, giving parties a perverse incentive not to crack down on illicit funds.

It is also politically expedient. Jaitley’s Bharatiya Janata Party spent the end of last year defending his government’s demonetisation move, portraying cash as a villainous instrument used by black money holders. Yet this seemed at odds with the Bharatiya Janata Party’s willingness to accept, indeed prefer, anonymous cash donations to fund its operations.

Unfortunately, like a move announced last year that BJP President Amit Shah will receive account details of all party MPs and MLAs – clever messaging without any actual impact – Jaitley’s measures are also similarly ineffectual.

He mentioned several provisions that have been in place for years now, and haven’t done much to prevent corruption. Of the two genuinely new measures, Jaitley introduced an electoral bond and proposed to lower the rate of permissible cash donations from Rs 20,000 to Rs 2,000.

The latter does little except to force parties to print out more receipts. Earlier, parties showed most of their funds from unnamed sources donating just under Rs 20,000. Now they’ll do the same, except under Rs 2,000. Without a cap on the number of these transactions, or disclosure about the donors, the change in threshold is mostly meaningless. Similarly, while an electoral bond might be an innovative instrument, Jaitley has said that the donor would be anonymous, meaning no transparency.

Far from throwing open the doors to their finances, the BJP has just installed frosted glass windows. We still cannot see where the majority of funds is coming from. If the BJP is genuine about wanting to improve political transparency, it could start by doing away with the very idea of anonymous donors in the first place.


  1. P Vaidyanathan Iyer in the Indian Express says the 2017 Budget was restrained so that’s the government can loosen the purse strings in next year’s speech, with the 2019 elections on the horizon.
  2. “Half-measures will not go even halfway in achieving the purpose of bringing about transparency and accountability in political donations,” says a leader in The Hindu
  3. “The budget has done some things right but there is a limit to what can be achieved through stroke-of-the-pen reforms,” writes Indira Rajaraman in Mint
  4. Jagdeep S Chhokhar is not impressed with the Budget’s section on transparency in political funding. 

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