The government is planning to introduce amendments to the finance bill which, when implemented, will allow companies to donate as much as they want to political parties.
The amendments to the finance bill will also let the companies to keep their contributions a secret.
A total of 40 amendments have been proposed many of which, as a section of the media reports, are different from what Finance Minister Arun Jaitley said in his budget speech on February 1.
Till now companies could contribute up to 7.5 percent of the average of its net profits in the last three financial years to political parties. It was also mandatory for them to disclose which party they are making the contribution to.
The proposed amendment seeks to remove that limit. It is not clear whether the limit has been raised or removed altogether.
Once the bill is passed, companies will no longer have to reveal the name of the parties they are making the contribution to. This appears to go against the transparency measures taken to clean up the culture of political funding in India.
The government has imposed a limit on cash donations to political parties from unknown sources, which is a great move.
At the same time, the proposed amendment warrants that companies make their donations via cheques, bank draft or digital means. This is aimed at helping keep a record of all transactions thus curbing the flow of black money.
Also, unlike what was said in the budget speech, the government has reduced the cash transaction limit from Rs.3 lakh to Rs.2 lakh. The Special Investigation Team on black money had proposed the limit of Rs.3 lakh.
The government has also made Aadhaar mandatory for filing tax returns and obtaining a PAN card.
The opposition, however, claims that the Centre is using a “back door” to bypass the Rajya Sabha to amend laws by including amendments are not related to finance or taxation in the finance bill.
They claim that since a finance bill does not require the approval of the Rajya Sabha, the inclusion of the unrelated amendments in such a bill will help them go past the upper house where they are not in a majority.