Financial transparency: let’s start with our legislators

When it comes to black money, the political class is vociferous in seeking action. Then how come tax returns of our MPs are not in public domain?

Sushmita Samaddar | November 21, 2014

The debate stealing the limelight in the past few weeks has been about the new fervour in the government to control the burgeoning problem of black money in the country. Prime minister Narendra Modi has been reiterating his pledge to battle black money, roping in Indian banks to unveil the wealth that has been stored under the façade of trusts, collecting the names of foreign bank account holders and investigating these accounts through the SIT. In all this, the buzzwords of transparency and accountability have been invoked in the media and by the government several times. But of course, greater transparency and accountability is an ideal to aspire to in any democracy. The question that remains to be asked is; would the same standard of transparency and accountability be held to our legislators?

In February 2010, the Association for Democratic Reforms (ADR) filed an RTI application with the respective income tax departments to retrieve the IT returns of 20 MPs with exponential growth in assets between the previous two elections. Thus, started a four-year long battle to have the IT returns of MPs in public domain. On April 16, 2013, a bench of the central information commission (CIC) held a hearing on this issue and reserved the judgment. The respondents at this hearing were lawyers, chartered accountants and representatives of Uday Singh, Maneka Gandhi, Sachin Pilot, Dushyant Singh, Kumari Selja, Beni Prasad Verma, Ajit Singh, Lalu Prasad and TR Baalu along with the CPIOs to whom the RTI applications were sent. It is expected that a hearing would be held after the appointment of the chief information commissioner (for which a three-member selection committee has been constituted).

What needs to be examined is that the political class that has been pontificating about the problem of black money has time and again failed to incorporate the same ideals in the execution of duties as parliamentarians. Some singularly original arguments made by the respondents at the CIC hearing were that because every taxpayer serves a larger public interest by paying tax, to single out parliamentarians for disclosing their IT returns under the argument of public interest is only to feed some private curiosity of the appellants. The seeming earnestness by the political class towards combating black money apparently extends to everyone other than their own threshold.

Why do we need the IT returns of MPs in the public domain? To answer this simple question we only need to go back to the supreme court order of March 13, 2003, which made it mandatory for candidates contesting elections to disclose their criminal and financial antecedents by way of a sworn affidavit, where the court observed what was held in the PV Narasimha Rao vs State case of 1998:
“They are the repositories of public trust. They have public duties to perform. It is borne out by experience that by virtue of the office they hold there is a real potential for misuse. The public awareness of financial position of the candidate will go a long way in forming an opinion whether the candidate, after election to the office had amassed wealth either in his own name or in the name of family members, viz., spouse and dependent children. At the time when the candidate seeks re-election, the citizens/voters can have a comparative idea of the assets before and after the election so as to assess whether the high public office had possibly been used for self-aggrandizement. Incidentally, the disclosure will serve as a check against misuse of power for making quick money – a malady which nobody can deny has been pervading the political spectrum of our democratic nation….”

At the time of filing their nominations, it is mandatory for candidates to disclose their IT details in an affidavit, so the disinclination to declare their IT returns once in office seems inconsistent. To be fair, when the ADR requested the Rajya Sabha and Lok Sabha MPs in 2013 to suo motu disclose their IT details, 20 MPs and 8 MLAs obliged. If some section of the political class, albeit small in proportion, can recognise the importance of their office and the need to uphold the same ideals they preach, it is hard to understand why the remaining MPs cannot follow suit.

An ADR analysis found that the assets of 165 re-elected MPs increased on an average by '7.40 crore between 2009 and 2014. The assents of 21 of them had shown an increase of more than '15 crore during the five-year term. This increase in assets could very well be completely innocuous, and if it is, then these MPs can reassure the citizens by simply putting their IT returns in the public domain.

In this matter, the umbrella issue of the parliamentarians’ reluctance to publicly disclose their financial interests comes to the fore. As of now, only the ‘Register of Members’ Interest’ of the Rajya Sabha MPs is in the public domain. There is no system in place for the filing of a similar register for Lok Sabha MPs. This oversight reflects an integral issue of monitoring the conflict of interest of legislators in the execution of their official duties. On August 24, 2011, ADR founder members Trilochan Sastry and Jagdeep Chhokar wrote to then speaker of Lok Sabha suggesting that provisions for filing the Register of Members’ Interest be incorporated for the lower house as well.

The ethics committee for the 15th Lok Sabha prepared a report on “Maintenance of Register of interests of Members of the Lok Sabha and declaration of interest in the House or a Committee thereof”. This report was first tabled in parliament on December 18, 2012. It stated that: “The aim of registration of interests is openness, which is so vital for the functioning of a parliamentary democracy. The Committee, therefore, feels that in order to avoid a conflict of interest, the provisions relating to registration of interests need to be incorporated in the Rules. Conflicts of interest may arise from financial interests as well as non-financial interests.”

Let us hope that the 16th Lok Sabha would take the necessary steps to set up the system of filing Register of Members’ Interest as recommended in the report.

The ADR analysed the asset declarations of union council of ministers submitted to the PMO office which is mandated in the Code of Conduct rules by the home ministry. While the move towards having these asset declarations in the public domain and filing them on a timely basis is a positive step towards transparency, the ADR report found that some of the declarations were not made in the letter and spirit of the rules. Many ministers did not give the value of the assets they declared or declared the purchase amount of the asset instead of the market value of the assets. The rules also mandate that the ministers declare their business interests along with their assets, which was missing from almost all declarations. If these asset declarations, with the aim of bringing in financial transparency, are to be taken seriously, a standard format mandating all the details to be filled should be instated.

The new government at the centre has infused the citizens with aspirations of change, growth and fresh perspective. The expectations from it are not high or unattainable. Simply put, what is expected is that the government live up to the promises it has made to the nation. One of the most integral aspects of a smooth functioning democracy is greater transparency and accountability of the MPs. The office they hold is of prime importance, bringing with it the duties and responsibilities of a public citizen, a position that holds the trust, faith and aspirations of all the citizens of the country. One of the first steps our elected representatives can take is to disclose their IT returns in the public domain. To bring transparency and accountability back in the nation, let’s start with
our legislators.

Samaddar is a researcher with ADR.



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