Law panel has largely made the right recommendations though it could have done more. But political parties have little interest in implementating them
Jagdeep Chhokar | April 13, 2015
Electoral reforms have been discussed in the country for quite a few years now and as a result, we now have a new report from the law commission of India, the 255th report, titled ‘Electoral Reforms’. It has been submitted in response to a request by the government of the day in January 2013 “to consider the issue of ‘Electoral Reforms’ in its entirety and suggest comprehensive measures for changes in the law.” The 261-page report, submitted to the law ministry on March 12, 2015, is a significant input in what needs to be done to improve the electoral system to make it more representative, meaningful, and relevant to the stage of evolution of democracy in the country today.
The opening chapter of the report draws attention to the 244th report of the commission which was submitted on February 24, 2014, in response to a supreme court order passed on December 16, 2013. The 244th report was titled ‘Electoral Disqualifications’ and dealt with two specific issues: de-criminalisation of politics and disqualification for filing false affidavits. The message of the first chapter is to let the reader know that the two reports, the 244th and the 255th, submitted now, should be read together to get a complete sense of what needs to be done to reform the electoral system.
Election finance reform
The next chapter titled ‘Election Finance Reform’ is the most important one of the report. There are many indicators of its importance. One, it is the first substantive chapter. Two, it is the longest, comprising almost 31 percent of the report (It is 64 pages long, the second-longest being 29 pages). It deals with the issue of election finance very comprehensively, listing out the current law on election finance and the need for reform. This is followed by a listing and discussion of the current laws regulating election expenditure, contributions, and disclosure.
Next is a comparative analysis of electoral expenditure, disclosure, and contribution laws from some of what are considered more mature democracies, the UK, Germany, the USA, Australia, Japan, and the Philippines, followed by a comment on state funding of elections. The chapter concludes with comprehensive set of recommendations.
A very important part of this chapter is the section titled ‘Understanding the reality of election financing today’. In this section, the commission makes very significant, and realistic, observations, some of which are worth reproducing in full.
“Although there are legal provisions limiting election expenditure for candidates and governing the disclosure of contributions by companies to political parties, the same is not properly regulated, either due to loopholes in the law, or improper enforcement” (Para 2.27.1).
“This is evident from the 2001 Consultation Paper of the NCRWC (National Commission to Review the Working of the Constitution) on Electoral Reforms, which estimates that actual campaign expenditure by candidates is ‘in the range of about twenty to thirty times the said limits.’ In fact, one of the major concerns regarding expenditure and contribution regulation is that the apparently low ceiling of candidate expenditure increases the demand for black money cash contributions and drives campaign expenditure underground, causing parties to conceal their actual source of funds and expenditure” (Para 2.27.2).
“Therefore, there is clearly under-reporting of election expenditure and opacity of political contribution. Part of the explanation lies in the lacunae in the law, and part in black money and poor enforcement” (Para 2.27.6).
“There are various loopholes in the laws regarding election expenditure, contribution and disclosure” (2.27.7).
“(M)ost importantly … the subject of regulation under Section 77 of the RPA only covers individual ‘candidates’, and not political parties” (2.27.7).
“(R)egarding political contribution, the '20,000 disclosure limit can be easily evaded by writing multiple cheques below '20,000 each, or giving the money in cash. Nor is the profit-linked contribution limit of 7.5% a significant restriction for large companies … while the law creates incentives for disclosure vide tax exemptions, it can be outweighed by the disincentive created by the loss of anonymity, especially given that in many instances big donors support multiple parties, or change their support, and do not want this information to be disclosed for fear of reprisal” (Para 2.27.12).
“(D)isclosure norms need to be strengthened … (T)he ECI’s [election commission of India’s] transparency guidelines do not have statutory authority and there is no legal consequence for non-compliance. Further, unlike many of the countries … political parties and candidates file their returns with the ECI, without putting up the information online (on the ECI’s website) or making it easily available for public inspection (barring an RTI). This is essential to bring about transparency in the public domain and to let the voters know the donors, contributions and expenditures of the parties and candidates. Moreover, in many cases such as compliance with section 29C of the RPA [Representation of People’s Act] (regulating political party disclosure) the only penalty for non-compliance is losing the income tax exemption. This is not a significant enough deterrent to parties” (Para 2.27.14).
The primary rationale followed by the commission is that “Disclosure is at the heart of public supervision of political finance.” Ensuring disclosure, according to the commission, “requires strict implementation of the provisions of the RPA, the IT [Income Tax] Act, the Company Act, and the ECI transparency guidelines, which need to be given statutory backing”. In addition, the evasion or dilution of disclosure “has to be tackled through a stricter implementation of the anti-corruption laws and RTI and improved disclosure norms.”
The essence of the recommendations is to amend various laws, the RPA, the IT Act, and the Companies Act. The most significant amendments suggested, as could be expected, are to the RPA. Some of the major recommendations are the following:
Regulating the inner functioning of political parties and inner-party democracy
This is the next issue that the law commission takes up. It makes a very important distinction between procedural democracy (the practice of universal adult franchise, periodic elections, secret ballot) and substantive democracy which it describes “to refer to the internal democratic functioning of the parties, which purportedly represent the people.”
It makes a further “distinction between the regulation of party practice and party ideology as components of internal and inner party democracy” and says “Of primary relevance in this chapter, is the first concern regarding the regulation of the practice of political parties in terms of internal elections, recruitment of party cadres, and development and training activities.”
Noting that “Currently, there is no express provision for internal democratic regulation of political parties in India,” and “Consequently, there is no mechanism to review a party’s practice against the principles enshrined in the constitution or against the requirements of the ECI’s Guidelines and Application Format for the Registration of Political Parties under Section 29A,” it seems to follow the lead given by its predecessor, the 15th law commission which submitted the first comprehensive report on electoral reforms in May 1999, the 170th report of the law commission titled “Reform of the Electoral Laws.” The 15th law commission had observed the following:
“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 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. A political party which does not respect democratic principles in its internal working cannot be expected to respect those principles in the governance of the country. It cannot be dictatorship internally and democratic in its functioning outside” (Para 188.8.131.52).
“With a view to introduce and ensure internal democracy in the functioning of political parties, to make their working transparent and open and to ensure that the political parties become effective instruments of achieving the constitutional goals set out in the preamble and parts III and IV of the constitution of India, it is necessary to regulate by law their formation and functioning” (Para 3.1.2) (Italics added).
Following the above, the 20th law commission, in the current, the 255th, report makes very significant recommendations, two critical ones of which are the following:
Another section, section 29R, should be inserted in the same part, providing for the de-registration of a political party for failure to contest parliamentary or state elections for 10 consecutive years. These recommendations for internal democracy, internal elections, candidate selection, voting procedures, and the ECI’s power to de-register a party in certain cases are extremely important and praiseworthy.
Another critical issue that has the potential to very seriously distort democracy in the country, even to the extent of making it a complete farce, which the commission has dealt with head-on, is of paid news and political advertising. In dealing with this issue, it has rightly taken a very broad approach taking into account the difference between paid news and political advertising, the legal and constitutional frameworks, the fundamental right to freedom of speech and expression, the use of information technology, and practices in some other democratic countries.
After taking all this into account, the commission has gone on to define paid news and political advertising as:
After the definitions, the commission has recommended that ‘paying for news’/’receiving payment for news’ be made an ‘electoral offence’ by inserting a new section (127B) in the RP Act. It expects that “Not only will the incorporation of this electoral offence make paying for news/receiving payment for news penal, the stringent punishment will ensure that if the candidates themselves are found guilty, then, in all likelihood, they will be disqualified pursuant to section 8(3) of the RP Act.” It has also recommended that ‘paying for news’ be declared a ‘corrupt practice’ by inserting a new sub-clause (iii) in section 123(2)(a) of the RP Act.
Strengthening the election commission
Another long ignored area that the law commission has dealt with is the strengthening the office of the election commission of India. For this it has recommended that equal constitutional protection be given to all members of the commission in matters of removability. This will require amending Article 324(5) of the constitution to equate the removal procedures of the two election commissioners with that of the chief election commissioner. The law commission has recommended that the constitution be so amended.
The law commission has also recommended that “The appointment of all the election commissioners, including the CEC, should be made by the president in consultation with a three-member collegium or selection committee, consisting of the prime minister; the leader of the opposition of the Lok Sabha (or the leader of the largest opposition party in the Lok Sabha in terms of numerical strength); and the chief justice of India. Elevation of an election commissioner should be on the basis of seniority, unless the three-member collegium/committee, for reasons to be recorded in writing, finds such commissioner unfit.” These changes will go a long way in removing uncertainties in the functioning, and increase public confidence in the working, of the ECI.
Lastly, it has recommended the creation of a permanent, independent secretariat for the ECI, along the lines of the Lok Sabha/Rajya Sabha secretariats, and the registries of the supreme court and high courts. This is something that was recommended by the Goswami committee as far back as 1990. The law commission is of the view that “It is of paramount importance to ensure that the ECI, entrusted with the task of conducting elections throughout the country, be ‘fully insulated’ from political pressure or executive interference to maintain the purity of elections, inherent in a democratic process.”
Another recommendation of interest and importance is that of giving the ECI power to de-recognise and de-register political parties under certain conditions. The power to de-register is particularly important as it had been expressly denied to the ECI by a decision of the supreme court in the Indian National Congress (I) vs Institute of Social Welfare case [(2002) 5 SCC 685].
The commission has also considered and made recommendations on a variety of other issues. Some of these are:
What could the law commission have done differently?
While most of the recommendations are unexceptionable and some are even praiseworthy, there are a few that could have been different. Some of these are discussed below.
The first issue is a possible limit or cap on election expenditure by political parties. While the commission has not made a specific recommendation in this regard, it has mentioned this issue at least at two places which clarifies what it feels on this issue. The commission observes in Para 2.28.3, “Political parties are free to spend any amount as long as it is for the general party propaganda, and not towards an independent candidate. Thus, there is no ceiling on party expenditure. It is recommended that the law on this point does not change, namely that there are no caps on party expenditure under the RPA given that it would be very difficult to fix an actual, viable limit of such a cap and then implement such a cap. In any event, as the experience with section 77(1) discussed above reveals, in the 2009 Lok Sabha elections, on average candidates showed election expenditures of 59 percent of the total expenses limit. There is no reason why the same phenomenon of under-reporting will not transpire amongst parties”.
It is further observed, in para 2.28.4, that “Placing legislative ceilings on party expenditure or contributions will not automatically solve the problem, especially without putting in place a viable alternative of complete state funding of elections (which in itself is next to impossible right now). Our previous experience in prohibiting corporate donations in 1969 did not lead to a reduction in corporate donations. Instead, in the absence of any alternative model for raising funds, it greatly increased illegal, under the table and black money donations.”
The above two paragraphs read in the context of the chapter on Election Finance Reform, give the impression that the commission is accepting lesser of the two evils, preferring expediency over doing the right thing. Its observation that “it would be very difficult to fix an actual, viable limit of such a cap” is debatable at best. It is admitted that it is indeed “very difficult to fix an actual, viable limit of such a cap” but one also has to go into the reasons why it is so difficult. The obvious reason that the commission seems to have refused to see is lack of financial transparency in the functioning of political parties. If political parties were transparent about their financial affairs or were made to be transparent, it would not only be possible but would actually be quite easy “to fix an actual, viable limit of such a cap”. How to make political parties financially transparent is the question that needs to be gone into to take this issue to its logical conclusion which regrettably the law commission has stopped short of doing. Some action is already on in this regard as mentioned in footnote 1.
Staying with the same issue, if as the commission has observed, “(T)he experience with section 77(1) discussed above reveals, in the 2009 Lok Sabha elections, on average candidates showed election expenditures of 59 percent of the total expenses limit. There is no reason why the same phenomenon of under-reporting will not transpire amongst parties,” then why did the commission not recommend removing the limits placed on election expenditure by candidates?
Having limits on the election expenditure of candidates and not having such limits on the election expenditure of political parties is obviously inconsistent. It would have been worthwhile for the commission to make some recommendation, or at least some observations, to resolve this inconsistency rather than ignore or evade the issue.
The next issue on which the recommendations are debatable is that of NOTA. The commission has rejected “the extension of the NOTA principle to introduce a right to reject the candidate and invalidate the election in cases where a majority of the votes have been polled in favour of the NOTA option”. It has, however, been generous in saying that “the issue might be reconsidered in the future”. With due respect to the commission, it seems it has, obviously inadvertently, fallen into the trap of formulating the issue in a particular way that invited rejection.
This is somewhat surprising in itself since the commission has mentioned clearly in its report that it “is evident in the (supreme) court’s judgment” that the judgment was just about NOTA and was not about the right to reject “which was not prayed for by PUCL. Instead, the court focused on how it hoped that NOTA would eventually pressurise parties to field sound candidates”.
It is also surprising that the commission formulated the issue combining NOTA and the right to reject when in para 11.5 of its own report it says “However, as former CEC SY Qureshi points out, NOTA is not the same as the right to reject.”
The commission begins para 11.4 of the report saying, “The premise of the supreme court’s decision was that secrecy of voting is crucial to maintain the purity of the electoral system”, though it recognises later in the same para that “it would foster the purity of the election process by eventually compelling parties to field better candidates, thereby improving the current situation.” In this context, it is worth reproducing in full the relevant paragraph of the NOTA judgment of the supreme court which is the first paragraph of the section titled ‘Conclusion’ in the judgment. This is what the paragraph says:
“Democracy being the basic feature of our constitutional setup, there can be no two opinions that free and fair elections would alone guarantee the growth of a healthy democracy in the country. The ‘Fair’ denotes equal opportunity to all people. Universal adult suffrage conferred on the citizens of India by the constitution has made it possible for these millions of individual voters to go to the polls and thus participate in the governance of our country. For democracy to survive, it is essential that the best available men should be chosen as people’s representatives for proper governance of the country. This can be best achieved through men of high moral and ethical values, who win the elections on a positive vote. Thus in a vibrant democracy, the voter must be given an opportunity to choose none of the above (NOTA) button, which will indeed compel the political parties to nominate a sound candidate. This situation palpably tells us the dire need of negative voting”.
In view of the above it should be clear that the interpretation that the judgment was premised only on maintaining the “secrecy of voting” is not the most comprehensive one.
The, current, 255th, report opens the discussion on NOTA with a reference to the 170th report of the 15th law commission, saying “The proposal to introduce negative voting to reject all the candidates if voters found them unsuitable was first discussed by the law commission in its 170th report in 1999, as part of its ‘alternative method of election’ where candidates would only be declared elected if they obtained 50%+1 of all the valid votes cast. Although agreeable with the 50%+1 idea, on which negative voting was predicated, the commission citing practical difficulties did not issue any final recommendations on the topic of negative voting” (Italics added).
In this connection, it is worth reproducing in full two relevant paragraphs and the recommendation of the 170th report of the law commission. These are:
“8.7 If the above practical difficulties and problems can be overcome, the idea of 50%+1 vote – and even the idea of negative vote (as explained hereinabove), can be implemented. We may mention that if electronic voting machines are introduced throughout the country, it will become a little more easier to hold a run-off election in as much as it would then be not necessary to print fresh ballot papers showing the names of the two candidates competing in the run-off – or for that matter, for holding a fresh election (in case the idea of negative vote is also given effect to)”.
“8.8 Alternative method mitigates undesirable practices. Probably, the aforesaid problems arise because of the vastness of the country and lack of requisite standards of behaviour and also of cooperation and understanding among the political parties to ensure a peaceful poll. As a matter of fact, the election offences are not decreasing but are increasing with every passing election. This is really unfortunate. Even so, we may make every effort to mitigate the undesirable practices and the alternate method of election set out in this chapter is certainly a step in that direction”.
“8.9 Recommendation. We accordingly recommend that the government and parliament may take a decision in the matter on a consideration of all the aforesaid circumstances.”
It should be clear from the above that the 170th report categorically said that the “practical difficulties” will “become a little more easier (sic)… if electronic voting machines are introduced throughout the country”. Electronic voting has now been in use for many years all over the country and consequently the “practical difficulties” foreseen by the 15th law commission in the 170th report either do not exist or at least are not as insurmountable as they were in 1999 when the 170th report was prepared. To reject making NOTA more effective and operational on the basis of the situation prevailing in 1999 appears to be less than fair.
Lastly, the arguments that “the (supreme) court was too optimistic in thinking that NOTA would lead to cleaner politics”, and that it is not worth pursuing as “1.1 percent of the total votes polled, or just less than 60 lakh votes, were cast in favour of NOTA” in the 2014 Lok Sabha elections. The supreme court, like all other institutions in the country, has to be optimistic if there is going to be any change for the better. If all institutions were to be “realistic” and recommend and attempt only what they think can be done easily, we can bid good bye to any significant improvement in the governance of the country or in the lives of citizens.
As for only “1.1 percent of the total votes polled (being) cast in favour of NOTA”, it is clearly a case of chicken or the egg having come earlier. It is obvious that voters will not cast their votes in favour of NOTA when they know that their votes will make no difference to the result.
It might have been more helpful if the commission could have gone not by the letter but the spirit of the supreme court judgment and made recommendations to make NOTA more effective and useful somewhat on the following lines:
A similar issue is the right to recall. The commission says it “is not in favour of introducing the right to recall in any form because it can lead to an excess of democracy, because the threat of recall undermines the independence of the elected candidates, ignores minority interests, increases instability and chaos, increases chances of misuse and abuse, is difficult and expensive to implement in practice, especially given that India follows the first-past-the-post system” (Italics added). Two points in the argument seem strange.
What exactly constitutes “an excess of democracy” is not clear. “The solution to problems of democracy is more democracy” is a well-known saying. It is strange that the law commission seems to be arguing for “less” democracy.
Another issue worth considering is should a society be doing a cost-benefit analysis on matters such as improving democracy? If something leads to “more” democracy and is considered worth doing, then should it be rejected on the basis that it is “expensive” to implement, particularly without working out the estimates of how much it would actually cost to implement it? And how would the benefits of an improved electoral and democratic system be computed to be compared to the costs? And how will the damage being done to the country and society by defective electoral systems be computed in cost-benefit terms? Admittedly, these are larger questions but they do need consideration before possibilities to reform the electoral and political systems are rejected.
The last issue that the commission could have dealt with differently is that of the powers of making rules. Para 16.13 of the report reads “Further, given that the RPA currently does not empower the ECI to frame rules under section 169 or prescribe the cap on election expenditure by an individual candidate under section 77 and Rule 90 of the Election Rules, the Law Commission does not recommend amending section 34 to vest such power with the ECI” (Italics added). Section 169 of the RP Act says “The central government may, after consulting the election commission, by notification in the official gazette, make rules for carrying out the purposes of this Act.”
In this context, the ECI had proposed as far back as 1998 that “Rule-making authority under the Representation of the People Act, 1950 and Representation of the People Act, 1951 should be conferred on the election commission, instead of on the central government, who should, however, be consulted by the election commission while framing any rule.”3
Not having the power to make rules hampers the effective and timely functioning of the ECI and would go a long way to enable it to do its job better. Providing for mandatory consultation with the government is a strong enough safeguard. It would have been worthwhile for the law commission to take this proposal of the ECI on board.
What will the law commission report achieve?
The law commission has done its job and, without any doubt, has done it very well. The question is what happens next. Its chairman, justice AP Shah, sent the report to minister of law and justice DV Sadananda Gowda “for consideration by the government”, on March 12.
A similarly comprehensive report, the 170th report of the commission, was submitted by the then chairman of the 15th law commission, justice BP Jeevan Reddy, on May 29/June 9, 1999, to the then minister for law, justice and company affairs Ram Jethmalani. Justice Jeevan Reddy did not send it only “for consideration by the government” but said, in the last paragraph of his letter, that “The commission is of the considered view that there is urgent and crying necessity to implement the aforementioned measures to reform the electoral system and to strengthen the democracy in our country.”
The experience with the 170th report was not encouraging, to say the least. Various governments, of different persuasions, during the last 15 years have not felt if necessary or desirable to table it in parliament and hold a discussion on it. Or, perhaps, parliament has not had time to discuss it. Some minor recommendations of that report have occasionally been discussed but nothing substantial or significant has been taken up seriously for implementation for which the then chairman of the law commission felt there was “urgent and crying necessity to implement”.
Independent of the fate of the 170th report, the 255th report itself contains some very revealing, and disturbing, data which may be considered to be a pointer to its possible fate. Its first, introductory, chapter says that out of the 157 responses that the commission received to its first consultation paper, only two were from political parties, including one from a party called the Welfare Party of India. In the second round of consultation, it sent out a questionnaire which, sadly again, did not do much better. It received responses from two national parties and three registered state parties, two of which are the Zoram Nationalist Party and the People’s Party of Arunachal Pradesh.
The simple inference that automatically follows the above is that an overwhelming majority of the mainstream political establishment, including most of the major political parties, have no interest in electoral reforms. That this inference may not be too far off the mark is evidenced by the developments referred to in footnote 1 earlier.
The political situation in the country over the last five to 10 years seems to have been undergoing a slow metamorphosis which seems to have accelerated over the last three-four years. A government has full majority in the Lok Sabha after 30 years. Power at the centre has changed hands after 10 years. A new and emerging political party which evolved out of a people’s movement has won an unprecedented majority in the Delhi assembly. The youth who are in a majority seem to be restless with the current situation.
Whether this changing situation will also cause a change in the fate that this report will meet is a question only time will answer.
One hopes not only the government but the entire political establishment will rise to the occasion and do what democracy needs to survive, if not thrive.
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