Loksatta "Anti-Corruption"-Discussion Paper



Most thinking citizens have come to the conclusion that India is facing an extraordinary crisis today. The manifestations of this crisis -- the all-pervasive, inefficient state, increasing lawlessness, competitive populism, criminilisation of polity, ever-growing nexus between money power, crime and political power, excessive centralization, serious erosion of legitimacy of authority and extremely tardy and inefficient justice system -- all these are only too evident to all of us.

Causes of Crisis

2. This crisis is not on account of decline in values in society, nor is it because we have the wrong kind of people in politics, bureaucracy and judiciary. Essentially, the crisis of governability in India is a result of two major flaws in our governance structure. Firstly, good behaviour is not consistently rewarded by the Indian state, and bad behaviour is not consistently checked or punished. In fact, the contrary is true, and there is a strong feeling throughout the country that in our governance structure it is bad behaviour that ensures rewards and success. Thanks to a very poor design of our democracy despite noble intentions, honesty is no longer compatible with survival in political office, and politics and honour do not seem to coexist.

3. The second major flaw in our system is in the nature of power and its exercise. If power is defined as the ability to influence events, resources and human behaviour for the larger public good, then such power is severely restricted in our state functionaries at every level. Though it is difficult to quantify this phenomenon, some effort to do so may enhance our understanding of the problem. On a scale of achievement by state functionaries, if a quantum of 100 is what is possible in a well-functioning governance structure, and what is necessary in a well-run civil society, then the best of the functionaries in the Indian state are able to achieve only about 15 to 20 on this scale. Whether these functionaries are the occupants of high public office like the Prime Minister, Union ministers and Chief Ministers or other elected politicians or appointed public servants or the members of judiciary, this limitation is very evident at every level in every organ of our state. If however power is defined as pelf, privilege, patronage, petty tyranny, harassment, or nuisance value, then almost all our state functionaries enjoy this negative power in abundance. This imbalance between the exercise of positive power and negative power is the most striking feature of the failure of the Indian state. As a result of this imbalance, all state functionaries have perfectly plausible, rational and realistic explanations and alibis for non-performance. The hapless citizen, who expects results, is perpetually frustrated.

4. On account of these characteristics of the Indian state, all institutions of state failed grievously, and are on the verge of collapse. This collapse encompasses the political executive, the legislatures, the bureaucracy and the judiciary. None can be blamed in isolation, nor can any segment escape the blame. However, this failure is not because individuals have failed, nor is it because the society lacks values, but it is a result of the fundamental flaws in our governance structure, which make this crisis inevitable.

5. In the face of the state's failure to optimize results, and its incapacity to check malignant use of power, the citizen is increasingly frustrated. Unlike the elites, who laud the modest accomplishments of state functionaries against heavy odds, the ordinary citizens are deeply discontented as they perceive the vast area of non-performance, and the pervasive insensitivity, corruption and unresponsiveness. As repeated rejection of status quo and voting out the party in power do not yield any positive results, there is increasing frustration, and easy recourse to violence.

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6. As a result, the nation faces three grave dangers. First, there is increasing lawlessness and anarchy in most parts of the country. As all governance structure fails, the citizen is no longer sure of the state meeting its obligations in any sphere. Any citizen, unadorned by power and privilege, who ever approaches any public office in the country to obtain something that is due to him as a matter of right, is fully aware of the magnitude of the state's failure. The all-pervasive corruption, harassment, delays, inability of the courts to render justice in time, the complexity of our administrative system that makes it wholly unintelligible to hapless citizens, the frequent breakdown of public order and increasing insecurity -- are all the visible manifestations of this anarchy. In a true sense, we are already in a state of anarchy. This anarchy is rising rapidly, and already in several pockets of the country life is never predictable. Justice, human rights, freedom and high quality of public services are all remote concepts which have no relevance to the day-to-day life of ordinary citizens.

7. The second danger ahead of us is the possibility of despotism by invitation. As the propertied and educated middle and upper classes, who have great stakes in peace and order, are increasingly disenchanted with the governance process, they are coming to the dangerous conclusion that freedom and democracy are synonymous with chaos and anarchy. Most of our urban middle classes have already come to this conclusion and have become votaries of some form of authoritarianism that can bring order and peace to the society at any cost, so that they can pursue economic growth unhindered.

8. In this milieu, the threat of dictatorship does not lie in a possible coup d'etat, but it may creep into the system by the acquiescence of the middle and upper classes - the political class, bureaucracy, armed forces, police, professions and the business class. In their desparate quest for order at any cost, they have little understand-ing of the nature of dictatorship, or its limitations, and the lessons of history are all-too-readily forgotten. Setting aside the fact that freedom and democracy are inalienable birth rights of every citizen, there is no guarantee that the right type of philosopher-statesman will ascend to the top in this dictatorship by invitation. If, by some good fortune, a philosopher-statesman does emerge as the supreme leader, there is no reason to assume that he will continue to be good after having tasted absolute power. If India, by some miracle, finds a philosopher-statesman-dictator who remains true to the ideals of the nation for life, there is no way by which he can actually deliver the goods all alone in a vast and complex plural society in a highly centralized despotic regime. If, by some modern electronic marvel, the centralized regime does find the means of governing our vast and complicated polity in a despotic manner, there is no reason why the ordinary people, who have no real stakes in order, should give up freedom and adult franchise, which are the only elements that lend dignity to their impoverished lives. The rejection of depotism by the poor and the deprived will result soon in a massive upheaval and bloodshed, and society will face even greater chaos and disorder.

9. As a wise man said, while the capacity of man for justice makes democracy possible, the propensity of man for injustice makes democracy necessary. Morally or pragmatically, there is no substitute to democracy. Any efforts to the contrary are not only doomed to failure, but will also drive the nation to disaster.

10. The third grave danger threatening the nation is the spectre of balkanisation. As authority and order break down, and as the governance apparatus fails to serve its main purpose of maintaining public order and ensuring cohesion and harmony in society, disintegration becomes inevitable. As the centralized and inert polity proves incapable of reform, many thinking persons, daunted by the vastness of the nation, its incredible plurality, and the complexity of problems, may be compelled to conclude that the only way of bringing about reform strengthening democracy and fulfilling people's aspirations is to break up the country. In addition, the economic liberalization process itself may exacerbate this latent tendency towards balkanisation. As some regions and states respond more positively to growth impulses, and have a better social and economic base to enlist mass participation in production process, they will be far ahead of the rest of the country. The disparity between, say 12% annual growth rate in one region and 3% growth rate in another, may not appear to be dramatic at first sight, but within a decade it will be very great. If both regions started at the same level of GDP per capita, the faster-growing region will have three times the GDP per capita at stable population. If already the faster-growing region has double the GDP per capita, then the disparity will be six times. Such disparities are unsustainable among regions in democratic society. The resultant mass migration from the poorer regions to the more prosperous areas in an already over-populated country will create untold havoc and suffering. Inevitably the social strife will lead to erection of barriers against entry and will lead to eventual balkanisation.

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11. Many Indians pin their hopes on economic liberalization to arrest and even reverse the drift, and to strengthen order, democracy and unity. However, there is no ground to believe that economic reform in itself, though welcome and over-due, will be able to resolve our crisis. On the one hand, our governance structure failed to ensure adequate human development. The failure of our delivery systems meant appallingly low levels of literacy and skills, poor health coverage and hopelessly inadequate rural infrastructure. As a result, the vast majority of Indians are not in a position to participate in the productive process of the nation meaningfully. Consequently, the fruits of economic reform, if unaccompanied by transformation of our governance structure and delivery systems, will be at best modest, transient and self-limiting.

12. As the latent, untapped productive and entrepreneu-rial potential of our middle and upper classes is now unfettered, there will be moderately high growth rates for some time. However, as the bulk of the population is excluded from this economic reform and growth process, high growth rates cannot be sustained and they will eventually taper off. China could successfully launch economic reform in 1978 on a superb base of human development, skills and rural infrastructure, built painstakingly between 1948 and 1978. Without such an enduring base, China would not have recorded spectacular growth rates now witnessed --about 10% compounded annual growth rate for an unbroken 18 year period. India certainly has the potential to match such growth, but only if we create a similar human development and rural infrastructural base.

13. In fact, economic reform with modest growth, unaccompa-nied by reform of governance structure, may exacerbate the dangers of authoritarianism. As the dominant groups seek stability, public order and opportunities for growth, they may be frustrated by a crumbling governance structure incapable of creating conditions for growth. The examples of China and South East Asia may be easily misinterpreted, and the middle and upper classes may come to the wrong conclusion that the full fruits of economic reform cannot be realized, unless there is an authoritarian regime, albeit benevolent, to provide order and stability. Little realizing that true democracy is in fact more conducive to competition and growth, these groups may throw the blame for poor results on the democratic process. Such authoritarianism is neither morally acceptable, nor will it achieve high growth, because the real problems are poor human development, low level of skills and inadequate rural infrastructure. In a plural society, authoritarianism will fail as comprehensively as our quasi-democratic state with poorly designed institutions, and without people's participation and role in governance. The only antidote to the ills of our democracy is more, better and truer democracy and not extinguishing the fires of freedom and self-governance.
14. The danger of balkanisation being accentuated by wide regional disparities, which are inevitable in the absence of reform of governance structure, has already been discussed in chapter 2 (para 10).


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15. True democracy has five essential ingredients - freedom, self-governance, empowerment of people, rule of law and self-correcting institutions of state. Freedom is the right of any individual to do as he pleases as long as his actions do not impinge on the freedom of others. The Indian state can be ranked quite high in terms of freedom of its citizens. True, there are serious limitations to enjoyment of freedom for the bulk of our poor on account of inadequate resources and skills, which is largely a result of the failure of the Indian state. However, there are not many state-imposed fetters to individual freedom and choice. On an imaginary scale of 0 to 100, India's score in terms of individual freedom will be probably above 60, and in some respects may be approaching 80 or 90.

16. Self-governance is the right of citizens to govern themselves directly or indirectly. What happened in 1947 was mere transfer of power from the colonial masters to the indigenous oligarchies. In our anxiety to preserve unity and order at all costs, we accepted centralization of power and bureaucratization, and marginalised the role of the people. We accepted many institutions purely on grounds of familiarity rather than suitability to our conditions and needs. As a result, self-governance is limited to an occasional exercise of franchise,that too when permitted by the local bigwigs. As the choice is often between Tweedledom and Tweedledee, this franchise has no real impact on the outcome, and self-governance became largely illusory. On our imaginary scale, self-governance component of Indian democracy can probably be quantified at about 25, a poor score for any vibrant democracy.

17. Empowerment is the ability of citizens to influence the course of events on a sustained basis and to make meaningful decisions on matters of governance having impact on their own lives. In a highly bureaucratized and centralized milieu, with most local institutions beyond the reach of stake-holders' influence, as stake-holding and power-wielding are divorced,empowerment of citizens is at a low-level. The local school,Primary Health Centre,or civic services -- are all beyond citizen's influence. The local public servant is unaccountable to people, and is often the master,rather than their servant. Many procedures are rigid, incomprehensible and highly formalized,preventing access to, and influence by,most ordinary citizens. Conse-quently, in terms of empowerment, on our imaginary scale our democracy would score no more than 5 or 10, an appallingly low score for any functioning democracy.

18. Rule of law is the concept of people being governed by law, and all citizens, irrespective of station and rank, being subject to the same laws to the same extent. It is the basis of all democratic governance, and all our institutions, including the executive and judiciary, swear by it. However, in reality, the centralised autocratic functioning of the political parties,the flawed electoral system,highly secretive,opaque functioning, the ubiquitous patronage system, the all-pervasive corruption and the excruciating delays in obtaining justice in law courts - all these made sure that the people with access to power ,muscle and means are more equal than the ordinary citizens. As a result, rule of law has been given the go by in most cases and most citizens have resigned themselves to lives of indignity and quiet desperation.

19. Self-correction is the ability of institutions of state to constantly learn from past experience and improve themselves in order to serve the people better. No design is ever perfect and no system,however well-constructed, can ever conceive of all possible eventualities, and provide for them. In any reasonably efficient and responsive governance structure, there must be a high degree of flexibility and self-correcting mechanism, so that the system is functional. In India, almost all institutions of state have become moribund and dysfunctional. There is no real self-correction visible on an enduring basis or in a meaningful manner. On our imaginary scale,the score for self-correction is almost zero.

Root of crisis - design of democracy

20.From the foregoing analysis it is clear that the Indian crisis is systemic. Our democracy is extremely flawed, and its poor design ensured the eventual breakdown. Our founding fathers were undoubtedly men and women of great calibre, commitment,depth and understanding. However, the compulsions of establishing and maintaining order at the earliest in the wake of the trauma of partition forced them to opt for continuity in the instruments of governance. The holocaust accompanying partition was undoubtedly extraordinary by any standards, and is unprecedented in peace time anywhere in the world.About a million people, both Hindus and Muslims, were butchered for no fault of theirs. About 600,000 people were maimed and more than 300,000 women were brutally raped. Given these cataclysmic events at the time of partition, restoration of order and maintaining the unity and integrity of India were of paramount importance, and our leaders understandably opted for continuance of time-tested instruments of governance. Many scholars have pointed out that there is about 80 per cent congruence between the Government of India Act of 1935 and the Indian Constitution of 1950 on account of these compulsions.

21. In addition, the euphoria accompanying the transfer of power led to a general belief that the moment the Indian leaders acquired power, things would automatically improve even with the old instruments of governance. However, the subsequent events belied these hopes. In the early years after the independence, the aura of freedom struggle, the towering stature of the early leaders associated with that struggle, the hope of better things to come and the inadequate understanding of the loopholes in the mechanics of governance ensured certain measure of stability, hope and harmony. As all such hopes are dashed, and persistent rejection of parties in power does not seem to result in any significant tangible improvement, people are increasingly sullen and resentful.


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How Intractable is our Crisis ?

22. The crisis of governability is undoubtedly grave. The nature and magnitude of our problems are daunting. What we are witnessing is the collapse of the Indian Republic. However, the Indian crisis is by no means intractable or immutable. There is no reason why India should inevitably succumb to the spectres of anarchy, authoritarianism or balkanisation. Over the years, the intractability of the Indian crisis, and the impossibility of successful reform have been overemphasized. India has the strength, resilience and intellectual and moral resources to respond to this, the greatest challenge of our history, with courage, imagination and creativity. However, we must first recognize that the only realistic and enduring solution to the crisis engulfing the Indian state is a holistic,peaceful, democratic transformation of the republic, with the objective of building at all levels free, self-governing, empowering, self-correcting institutions, capable of maintaining peace and harmony, preserving order and stability, strengthening unity and integrity, enabling freedom and participation and promoting growth and prosperity.

Limitations of Isolated Reforms

23. Isolated efforts to correct individual ills have largely been frustrated or failed because of the evil engulfing all facets of governance. No matter how well-meaning and necessary an isolated reform is, it will not yield adequate dividends, when it is unaccompanied by the other necessary changes. In this backdrop, the vested interests and status quoists can always cite the failure of the partial reform and use it as an argument against any serious reformhalf-hearted,well-meaning, . Time and again,the isolated, necessary but insufficient reforms have failed to energize the polity and improve the content of our democracy. The sporadic attempts to improve the conduct of elections, the repeated attempts of the various Administrative Reforms Commissions, the many Law Commission Reports,the introduction of the much talked about Panchayati Raj institutions in the 50Anti-defection Act through the s and 60s and the 73rd and 74th constitutional amendments in the 90s, and efforts like the amendment of the constitution are all examples of sporadic, isolated, insufficient and ultimately ineffective efforts to reform the Indian governance system over the years.

24. In this all-pervasive crisis of governability, the only realistic way out is a peaceful, democratic, holistic transformation of Indian governance structure. Such a transformation must address the basic processes of power and ensure that truly democratic,self-correcting mechanisms are in place. Every facet of reform must counter adequately the elements of crisis of Indian governance - the imbalance between the exercise of positive and negative power, the alibis for non-performance on account of the disjunction between the vote and welfare of citizens on the one hand, and between authority and accountability on the other, the incapacity of the administrative - legal structure to reward good behaviour and punish bad behaviour consistently, and the increasing incompatibility between honesty and survival in political executive office on the one hand and honour and politics on the other.In such a comprehensive reform process, each element of reform will reinforce the other elements, bringing out synergies and minimizing risks. A holistic reform also ensures adequate checks and safeguards against failure of any institution individually. Instead of failure at one level leading to failure at all other levels eventually, failure is arrested quickly and countered effectively before it does serious damage to the body politic. All the elements of transformation of our governance structure together must be capable of strengthening every facet of our democracy - freedom, self-governance, empowerment, rule of law and self-correcting institutional framework.

Reform Agenda - Stakes for all

25. We must keep in mind at all times, however, that the objective is to achieve transformation of our governance structure. Such an effort calls for the broadest measure of agreement among all segments of society, irrespective of competing, sometimes conflicting, sectional interests. All segments of society must have stakes in the agenda, and highly divisive and contentious issues must be left to public choice through the normal competitive electoral process. What we must aim at is creating a truly democratic framework that offers a platform for various ideologies and policy options to be discussed, debated and chosen by the people from time to time. It necessarily follows that policy issues should be left out of the national reform agenda. To be precise, those issues that have a bearing on the basic process of governance and the five ingredients of democracy as outlined above, viz: freedom, self- governance, empowerment of people, rule of law and self correcting institutional frame work, should constitute the agenda for democratic reform. Those issues which have no universality in their application and form part of the `zero sum game', whereby one segment gains at the cost of the other, must be excluded from the reform agenda and must be left to the competing political forces of the day. Only the essential principles of democracy, the basic rules of governance and constitutional safeguards are sacrosanct and non-negotiable and must be constitutionally sanctified in order to provide the basic framework for the competing political parties and individuals to acquire power and pursue those policies which have the broadest measure of public support from time to time.

National Agenda For Holistic Reform

26. We have broadly concluded in the foregoing chapters that the crisis of governance is affecting all organs of state and is systemic in nature. The resolution of the crisis has to be based essentially on the fundamental democratic principles of enlargement of freedoms, genuine self-governance, true empowerment of people, application of rule of law, and creation of self- correcting democratic institutions.

The reform agenda has to be minimalist and non-partisan, and must deliberately eschew highly contentious and divisive issues, so that the widest measure of consensus is possible. It must be practical and rooted in the Indian ethos, and must take into account our experience of working of the Constitution so far. Keeping in mind our past lessons and future objectives, the key elements of fundamental, holistic, democratic reform of our institutions of governance are suggested in the following six chapters:

1. Democratization of political parties
2. Separation of executive and legislature
3. Safeguards against executive abuse
4. Decentralization of our governance
5. Efficient and responsive bureaucracy, and
6. Speedy and efficient justice system


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27. Political parties are vital ingredients of a vibrant functioning democracy. They organize people, espouse causes, aggregate interests, seek people's mandate for a platform, acquire power, endeavour to set the national agenda, and implement it while in power. However, these vital instruments are almost entirely unregulated in India and their internal functioning is generally arbitrary, autocratic,undemocratic, invisible and unaccountable. It is inconceivable that undemocratic political parties can effectively safeguard and strengthen democracy. Many of the ills of our governance system can be directly traced to the undemocratic and unaccountable functioning of the parties. In reality, the parties in India function like private estates, the election process thus becoming a competition among closed oligarchies to acquire political power and control state resources. The first major area of reform must, therefore, be democratization of political parties in the following respects:

1.1 Membership

28. Most political parties do not even have proper membership rolls at various levels of their functioning. It is well-known that the major political parties have bogus members enrolled by overzealous fact could not conduct their organizational elections on the ground that they have bogus members. In many cases control of entry into the party gives enormous leverage to the bosses. Potential adversaries are denied entry and rivals are expelled from time to time for having the audacity to stand up to the party bosses. In the process, dissent is thwarted and unscrupulous coteries perpetuate their hold on party structures.

29. A political party is often a symbol of aspirations of millions of people and it represents the beliefs, dreams, concerns and experiences of countless people over a period of time. Denial of access to such parties or expulsion is the equivalent of political death sentence. By their very nature, parties are an integral part of the history of a nation and heritage of all society. Therefore, exclusion, entry or exit barriers, or forcible expulsion are tantamount to negation of the democratic rights of citizens.

30. Some people may argue that those members expelled may form another party or seek public support as non- unattached party independents. However, in reality no independents or unattached persons have ever made a significant impact on public life or succeeded in acquiring power in any major democracy in history. Even in mature democracies like Britain or the United States, new parties do not make a serious impact on public life. The travails of Liberal Party in the U.K. and the failure of an independent or third party candidate to acquire high public office in the U.S. clearly demonstrate that new political parties cannot be a viable option for dissenters. There is too much investment of a lot of energy , effort and passion by thousands of people in a political party to allow it to be a captive instrument in the hands of an unscrupulous, oligarchic coterie.

Therefore, for democratic functioning of political parties, it is imperative that all membership is open without any barriers. Individuals not towing the majority line can be sidelined by merely denying them leadership positions and marginalising them if the majority so wishes, but not by expelling them and denying them forever the opportunity to effectively propagate and pursue their political agenda.

31. In view of this, the following are the suggested major reforms to be carried out for democratization of political parties in respect of membership.

i) Membership must be voluntary and open to all citizens;

ii) No member can be removed or expelled from primary membership. A citizen who is a member can voluntarily leave the party but cannot be forcibly removed. However, he can be removed from elective offices within the party by majority consent, in accordance with the party's constitution.

iii) There must be a prescribed membership fee within reasonable limits to be paid by the members.

iv) Every member of the political party must have a photo identity card with a distinct membership number and other details incorporated.

v) Membership rolls must be published polling station-wise and constituency-wise to facilitate public scrutiny.

Internal Democracy

32. As a perceptive political observer commented some years ago, in the Indian political parties, the man who wears the crown is the king. Leadership is often acquired through undemocratic means and retained by the power of patronage rather than support of members. This paves the way for oligarchies dominating the political process and offering to people inadequate choice between Tweedledum and Tweedledee.

33. Therefore, parties by constitution or law must be com-pelled to practise internal democracy in a verifiable manner as follows:

i) The membership rolls published by the political parties at the polling station level and constituency level must be the basis for elections within the party.

ii) Every party at every level - constituency, district, state, national - shall elect its office bearers annually in the prescribed manner.

iii) The method of election within the party should be prescribed broadly by law, giving sufficient flexibility to the needs of individual parties.

iv) The annual election process within the political party must be supervised by law by an external statutory or constitutional authority like the Election Commission.

v) The law or the external regulatory agency shall have no power to determine the policies to be espoused by the parties or influence the outcome of elections.

1.3 Choice of Candidates for Elective Public Office

34. The most undemocratic arena of functioning of political parties debilitating our democratic process is the choice of candidates. The party bosses in command at the time have almost unfettered personal discretion in nominating candidates for public office on behalf of their parties. There is no open, democratic choice of candidates by party members and the people at large are denied genuine choice between democratically elected alternative candidates. The election process has become totally distorted and is reduced to a cruel choice between Tweedledum and Tweedledee in most cases. Many concerned citizens are repelled by the ugly choices and often unwisely prefer to stay away from the electoral process. As the candidates are imposed on the unwilling public and party members, no matter which party or which candidate wins, the real losers are the general public and the democratic process itself.

35. Therefore, the choice of candidates for elective public office must be democratically made by the recognized political parties as follows:-

i) Every member of the party who is eligible to hold a public office under the constitution and law shall have the right to seek the nomination of the party for such public office.

ii) The party's nominee for elective public office shall be chosen by a ballot in the prescribed manner.

iii) At the lower level, all the party members in the constituency will be electors directly for choosing their party nominee. At the higher level,the delegates or electors elected by the primary members will choose their nominee to make the process of election of candidates practical and less cumbersome.

iv) This selection process of the nominee of the party for elective public offices shall be supervised by an external constitutional statutory authority like the Election Commission to ensure fair opportunity to all members of the party.

1.4 Political and Campaign Funding

36. Political parties collect vast sums of money, mostly from undisclosed sources, for their normal activities, election campaigns, public rallies and advertisements, and to enhance the prospects of individual candidates. It is widely known that a huge public rally involving mobilization of 100,000 people often involves an expenditure of crores of rupees. It is widely acknowledged that a serious campaign for a state assembly constituency would entail an expenditure of about Rs 25 to 30 lakhs in most major states and the campaign for a parliamentary seat is closer to a crore of rupees. There are several instances where candidates spend several times these amounts. In almost every single election in the country, all major party candidates are forced to exceed the expenditure limit prescribed by law. In virtually all cases, the sources of funding and other expenditure are totally undisclosed and unaccounted. As a result money-power is acquiring dominance in our elections and has become the chief source, as well as primary cause, of corruption in public life. The campaign cost of parliamentary general election for all parities put together is of the order of about Rs 1500 crores to Rs 2000 crores. Similarly in most major states, for Assembly elections the campaign cost of all parties put together is about Rs.150 to Rs.200 crores.

37. Therefore regulation of political and campaign funding and utilization on the following lines is absolutely critical for the future of our democracy:

i) There must be realistic and reasonable ceilings on campaign expenditure in place of the present wholly unrealistic and almost universally disregarded ceilings.

ii) There must be reasonable limitation imposed on the quantum of funding by individuals, or corporate entities. These ceilings must be uniform for all individuals and must be in accordance with rational criteria in respect of corporate entities in the form of a fixed proportion of the net surplus generated in a given year.

iii) The funding must be open and by cheque with full and compulsory disclosure to the public, tax authorities and Election Commission.

iv) All funding within ceilings prescribed must be given appropriate tax incentives so that legitimate funding for political activity is encouraged.

v) Any violation of funding disclosures or exceeding ceilings must be punishable with a minimum imprisonment of, say two years. In case of prosecution, the burden of proof must rest with the accused.

vi) There must be compulsory statutory audit of all political party funding and campaign expenditure.

vii) The candidates must be obliged to furnish a full statement of accounts. Any violation or concealment and non-disclosure must entail a minimum imprisonment of two years. The burden of proof must rest with the candidates.

viii) The auditing of campaign funding, party funding and expenditure should be undertaken by an external statutory / constitutional authority like the Election Commission.

1.5 Other Electoral Reforms

38. Proliferation of non-serious candidates, mushrooming of small political parties and excessive election expenditure have all become the bane of our electoral system. Also the identification of every elected functionary with specific territorial constituency has led to unhealthy scramble for resource allocation and patronage distribution, with few legislators having the will, courage or strength to pay attention to the larger issues of governance.

39. To overcome these unhealthy trends, the following reforms are needed:

I) Political parties must be recognized only if they fulfill the conditions listed above and have obtained at least 10 percent of the votes polled in the area of their operation - regional / national - in the preceding election. Until such time they obtain 10 percent of votes they will be unrecognized political parties, though registered. Even registered unrecognized
political parties must conform to the regulations as prescribed in order to continue the registration.

ii) Unregistered political parties and non-party candidates can be on the ballot only on obtaining written support of a prescribed minimum number of voters, say one percent, in the constituency / territory.

iii) There must be a reasonable security deposit for contestants which would be refunded only if 10 per cent of the valid votes are obtained by the candidate. This amount should be of the order of Rs.25,000 for an assembly constituency and Rs.1 lakh for a parliamentary constituency.

iv) 50 per cent of all seats in the representative bodies should be filled by proportional representation. Only those registered parties which obtained at least 10 per cent of the valid votes shall be eligible for proportional representation.

v) The remaining 50 per cent of the seats will be filled by the first-past-the-post system constituency-wise.

vi) The list of party nominees for election directly constituency-wise or through proportional system shall be chosen democratically by party members as outlined above.

vii) All parties must have access to electronic media operating within the territory, whether state-owned or private. There must be an appropriate law to make it mandatory for the media to provide equal, free, unpaid access to all recognized parties. The Election Commission shall have the authority to determine the modalities of such access from time to time. Registered political parties will obtain access only after being recognized.

viii) The state shall provide a common platform for public meetings to all recognized political parties under the supervision of the Election Commission in each constituency. The modalities shall be determined by the Election Commission and the expenditure so incurred shall be borne by the state.

ix) Public rallies shall be strictly regulated and preferably discouraged during election campaigns. There can be public gatherings in closed doors under covered roofs.

x) There can be paid advertising by the candidates in electronic media and print media if they so choose, which shall be taken into account while calculating the election expenditure.

xi) Every item of expenditure shall be by cheque and any violation by the candidates or agents or suppliers of material etc. shall entail a minimum imprisonment of two years if proved. The burden of proof shall rest with the accused.

xii) Every voter, to be eligible for voting, shall have a photo-identity card issued by the election authority.

xiii) Voting shall be by electronic voting machines as far as possible, to facilitate fair polling and easy counting.

xiv) Campaign period shall be reduced to two weeks.

xv) Candidates shall be barred from contesting in more than one constituency.

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