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AUGUST 3, 2017

How to curb ‘invisible money’

  • The statement by Union Finance Minister Arun Jaitley recently that the Election Commission has failed to curb ‘invisible money’ in polls is remarkable.
  • The Election Commission (EC) works in accordance with Article 324 of the Constitution of India, the Representation of the People Act (RP Act), 1951 and the rules framed by the government thereunder, and various judgments of the Supreme Court and High Courts. The power to frame rules under the RP Act has not been given to the EC by successive governments, which includes the current one.

Action and reaction

  • Most of the reform proposals by the EC have not been acted upon. It sent 22 proposals in 2004. In December 2016, it sent 47 proposals including those for “Election expenses and election petitions”, “Election campaign and advertisements”, and “Reforms relating to political parties”.
  • To what extent electoral bonds will make ‘invisible money’ visible was explained by FM after he presented the Budget. In the media interaction, he said: “These bonds will be bearer in character to keep the donor anonymous.”
  • The other significant proposals that the Budget made were (a) to remove the limit of 7.5% on profits that a company can donate to a political party, and (b) to remove the requirement that the company making a donation to a political party disclose the name of the party and the amount donated.
  • It should be obvious that political parties will have no objection to the electoral bonds system as it allows them to raise money with ‘anonymity’.
  • The Law Commission studied the issue in 1998-99 and presented its comprehensive assessment and proposals in its 170th report, titled ‘Reform of the Electoral Laws’.
    • This paragraph captures the essence of its recommendations: “On the parity of the above reasoning, it must be said that if democracy and accountability constitute the core of our constitutional system, the same concepts must also apply to and bind the political parties which are integral to parliamentary democracy. It is the political parties that form the government, man the Parliament and run the governance of the country. It is therefore, necessary to introduce internal democracy, financial transparency and accountability in the working of the political parties.”

The RTI way

  • A logical and simple way of introducing “financial transparency and accountability in the working of the political parties”, and recommended by the Law Commission, is to bring them under the Right to Information (RTI) Act, 2005.
  • The Central Information Commission (CIC) had said in a full bench decision in June 2013 that six national political parties were indeed ‘public authorities’ under the RTI Act as they fulfilled all conditions specified in Section 2(h) of the RTI Act which defines ‘public authority’.
  • When a petition was filed in the Supreme Court to get the decision of the CIC implemented, the government said in a sworn affidavit submitted to the Supreme Court that political parties should not be under the purview of the RTI Act. The petition is still pending in the Supreme Court.
  • The stand of the government in the Supreme Court is further evidence of what the government is not willing to do.

After the cut

  • The lowering of rates by the Reserve Bank of India — which cut the repo rate by 25 basis points on Wednesday — may not have excited the financial markets considering that such a cut had been priced in after the fall in Consumer Price Inflation over the last three months. More so, after the SBI cut its savings deposit rates by 50 basis points on Tuesday.
  • The fact that the monsoon has been normal and the roll-out of the Goods and Services Tax or GST has been without much disruption also offered elbow room to the Monetary Policy Committee to make the cut this time, perhaps reluctantly so.
  • The MPC has said that while upside risks to inflation had either reduced or materialised in the run-up to this policy review, it expects inflation to rise from the current lows to 4 per cent in the last quarter of FY 18.
  • Such a projection is based on factors such as the proposed farm loan waivers by many states, a cut in development spending and inflation spillovers, the implementation of awards of salaries and allowances by states on the lines of the Centre and the bottoming out of food prices, prompting the MPC to keep the policy stance neutral.
  • Going by the MPC’s outlook, the underlying growth impulses in industry and services are weakening, given corporate deleveraging and “retrenchment” of investment demand. The slump in manufacturing after the introduction of the GST is also reflected in the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) which at 47.9 per cent in July is at its lowest level since February 2009.

Clearing the confusion over NEET

What is NEET?

  • The National Eligibility cum Entrance Test is a common entrance test for aspiring students, based on which they will be allotted seats in undergraduate medical and dental colleges in India, both in the government and private sector.
  • The test is conducted by the CBSE and is now available in many regional languages. It is also conducted to regulate entry in postgraduate medical courses.

What is the confusion?

  • NEET was conceived by the Medical Council of India in 2010 as a means of raising the quality of students being admitted to medical and dental colleges and thereby graduates.
  • Several States including Tamil Nadu, Maharashtra and Gujarat objected to the proposal on various grounds, including the fact that CBSE students would have an unfair advantage as the test would be based on that board’s syllabus.

Why is Tamil Nadu opposing the test?

  • The State’s rationale was that Tamil-medium students and rural students would have a fair shot at making it through professional courses only if there was no entrance test.
  • In February this year, the State Assembly passed two Bills seeking to exempt Tamil Nadu from NEET at both the UG and PG level. These have been forwarded to the President for assent.

What is the situation now?

  • Presidential approval has not yet been granted. Meanwhile, the test was held and after the results were announced, the government said that it would reserve 85% of the seats for students from the State board, leaving the rest for the other boards.
  • This was struck down by the Madras High Court. State officials continue to seek from New Delhi an exemption from NEET.