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EC recommends cap on cash donations to political parties

The Commission is aiming to bring in reforms and transparency in donations received by candidates and political parties.

September 20, 2022 / 06:19 PM IST
Election Commission of India

Election Commission of India

The Election Commission of India has proposed an amendment to the Representative of the People (RP) Act to cleanse election funding of black money. Donations to political parties above Rs 2,000 cannot remain anonymous.

Chief Election Commissioner (CEC) Rajiv Kumar has proposed reducing anonymous political donations to Rs 2,000 from Rs 20,000. In a letter written to law minister K Kiren Rijiju, it has been also sought to cap cash donations at 20% or at a maximum of Rs 20 crore, according to a report in Hindustan Times.

The Commission is aiming to bring in reforms and transparency in donations received by candidates and political parties. Earlier the poll body had announced that it was taking action against more than 2,100 entities, categorised as registered unrecognised political parties (RUPP) for flouting rules and election laws.

The poll panel had delisted 284 defaulting and non-compliant registered unrecognised political parties (RUPPs), declaring more than 253 of them inactive.

As per Section 29-C of the RP Act, all the political parties have to inform Election Commission through their contribution report about the donations they have received above Rs 20,000. If Law Ministry approves the proposal of the poll body, political parties will have to report donations above ₹2,000, enhancing transparency.


If a political party fails to submit a report, then it shall not be entitled to any tax relief under that Act.

The Election Commission also found that some political parties had reported their donations as nil, but their audited accounts statement showed they had received a huge amount. Many transactions were in cash, below the threshold limit of ₹20,000, as per a report in The Hindu.

In the letter, the ECI has also suggested that every candidate should open a separate bank account for election purposes. The candidate has to route all expenses and receipts through this account and furnish these details in their account of election expenditure.

Election Commission has also sought reforms to ensure that no foreign funds get into the funds of the parties as stipulated under the Representative of the People (RP) Act, 2010.
Moneycontrol News
first published: Sep 20, 2022 06:19 pm
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