New Delhi, July 22, 2017

Govts, pol parties, even Election Commission failed to check invisible poll funding for past 70 yrs: Jaitley

Finance Minister Arun Jaitley Saturday said demonetization and GST have led to greater digitization in the country and increased the tax base but “invisible” election funding is still a problem India is grappling with.

Addressing the Delhi Economics Conclave here, the finance minister said he hoped more digitization and less cash will be able to bring cleaner money into elections and make them more transparent.

“A problem I am right now grappling with and we have to really introspect is for 70 years India’s democracy has completely been funded by invisible money. Elected representatives, governments, political parties, Parliament and I must say even the Election Commission has completely failed in checking it,” Jaitley said.

“…And therefore having failed to check it for 70 years as to how the world’s largest democracy itself is being funded, the solution lies not in finding the fault but to suggest remedies. I, therefore, had suggested in this year’s Budget some solution and we are working on it,” he said.

The finance minister said that he had also asked political parties orally as well as in writing to come with a better suggestion for clean election funding but rued that no political party had yet come to him with a suggestion.

“Not one suggestion has come forward yet because people were quite satisfied with the existing system itself,” he said.

Jaitley in his Budget this year had suggested the use of election bonds and funding elections through cheques above a certain limit.

He said digitization would not only block leakages in the system but also funding more transparent. One of Saturday’s topic of discussion in the Economic Conclave was “The Future of Cash”.

Jaitley said for years the country had reconciled to a normal -- a very large number of tax non-compliance and very large amount of transaction which took place outside the system.

"There was almost a helplessness in trying to deal with the situation. Every year through the Finance Bill we would announce some changes which at best had a marginal impact. I think the lasting impact of those marginal changes was not very significant.

"And therefore, steps had to be taken in order to make a very significant impact," he said, adding the benami property law is "sending a shiver down the spine" of those who conventionally used this methodology of round tripping of tax avoided money or corruption money and bringing it back into the system.

Jaitley said sooner the business of routing money through shell companies collapse, I think the better it is going to be for the formal economy.

Singapore Deputy Prime Minister Tharman Shanmugaratnam in his address said that India was currently faced with the problem of joblessness and the government needed to change policies that were anti-employment.

“India’s biggest challenge is jobs. India has lost a lot of time. Its employment legislations are anti-employment and it does not prepare people for the need of modern economics,” he said.

[The Deccan Herald]