>>
Home > ML Update > Vol. 20, No. 14 > Condemn Doing Away of Transparency for Corporate Funding of Political Parties Through Finance Bill, 2017

Condemn Doing Away of Transparency for Corporate Funding of Political Parties Through Finance Bill, 2017

The counting process of banned notes deposited during demonetization seems to be an endless exercise with the RBI still refusing to spell out the numbers but not so with corporate funding of political parties where companies now do not need to count how much share of profits they are giving as political donations with the passage of Finance Bill, 2017 and with removal of existing cap of 7.5 percent of average profits of last three years on Companies for funding of political parties. And to cap it, the amendments in the Companies Act have the effect that the Companies are now not even required to disclose the name of political parties to whom the funding was provided. All this obviously in name of strengthening framework of Corporate Governance, curbing corruption and bringing transparency in the funding of political parties!

The cap removed was intended for the purpose that companies shouldn’t be reduced to fronts or channels for merely political funding. The protection is no more with us. In a related development Finance Act, 2017 has introduced the concept of “Electoral Bonds”. Though the bank will capture the identity of the person when Electoral Bonds are bought but it is not revealed to the public at large and there is no requirement for political parties to disclose the name either as these bonds are planned to be bearers bonds and thus corporates can use them in big way to fund parties while remaining anonymous.

Top