By Aparajita Gupta

Kolkata, July 13 (IANS): Political scientists, politicians and economists are divided over Finance Minister Pranab Mukherjee's budget proposal of making political donations totally tax-free in a bid to bring in transparency.

While some doubt that the proposal will have any impact on reducing the flow of slush funds, others say some of the black money in circulation could become white.

Economist Abhirup Sarkar described the proposal as unjustifiable. "This is not for a charitable cause. It's true that political parties thrive on donations, but there is no reason to encourage donations to political parties."

"Transparency has to be ensured in a different way. This is not the way to ensure transparency. Do you think in this way you can stop the flow of black money?" asked Sarkar, a professor at the Indian Statistical Institute here.

Mukherjee in his budget speech tabled the proposal: "The house will agree that it is desirable to bring about transparency in the funding of political parties in the country.

"With a view to reforming the system of funding of political parties, I propose to provide that donations to electoral trusts shall be allowed as a 100 percent deduction in the computation of the income of the donor. For this purpose, electoral trusts will be such trusts as are set up as pass-through vehicles for routing the donations to political parties and are approved by CBDT (Central Board of Direct Taxes)."

Economist Dipankar Dasgupta said instead of adding to transparency, the suggestion will make the donation system more opaque.

"I doubt how much transparency it will bring to the system. Rather chances are high that it will make the system opaque. I don't know how much declaration will happen from both sides (donors and political parties). Rather donors will get special advantages for contributing to parties."

But, on the other side, he felt the scheme could help convert some percentage of black money in circulation into white.

Noted political scientist Sabyasachi Basu Ray Chaudhury, however, described the proposal as a "positive step".

"In principle this is a positive step. Ideally this should be the case to maintain transparency in the electoral process in any democracy. But the rider is how will this be implemented? I am looking forward to the procedure now," he said.

But Basu Ray Chaudhury answered in the negative when asked whether the move can put a full stop to the flow of black money into the electoral system.

"I don't think so. Parallel economy will always be there. The route for parallel donation will continue to remain open," he said, adding it was not possible to estimate the amount of black money in circulation.

Communist Party of India-Marxist (CPI-M) Lok Sabha leader Basudeb Acharya told IANS that his party was opposed to the move. "The government of India should form a corpus from which money should go to every party. There should not be any discrimination. We support state funding of the electoral process. We had been demanding a central corpus for long but no one is listening to us."

In 1998, the centre, bowing to demand from across the political spectrum, had set up a multi-party parliamentary committee under the chairmanship of Indrajit Gupta to study campaign funding.

The committee submitted its recommendations a year later, suggesting such funding be confined to parties recognised as national parties or state parties by the Election Commission and to candidates fielded by such parties.

Trinamool Congress leader Madan Mitra found merit in Mukherjee's proposal. "This is a welcome move. This will bring transparency into the system and help convert black money into white."