Inadequate disclosures

Prime Minister Narendra Modi’s efforts to blunt growing criticism against the ill-planned demonetisation by ordering all Bharatiya Janata Party MPs and MLAs to disclose their bank transactions between November 8, the day Rs 500 and Rs 1,000 notes were banned, and December 31, when the exercise ends, are welcome but they may not stand up to scrutiny. As a means to burnishing the BJP’s credentials of integrity and honesty, the exercise is riddled with contradictions. First, it is not clear why the exercise should begin from November 8 and not September 16, the date that marked the start of an inexplicable surge in bank deposits and from which the Reserve Bank of India retrospectively imposed a 100 per cent incremental cash reserve ratio till December 9. Advancing the date of disclosure would go some way towards allaying strong suspicions that this flow is related to selective advance information about demonetisation. Second, it is unclear why the details are limited to the party’s lawmakers and not their relatives as defined by the Election Commission’s rules on disclosure. Third, and most important, it is difficult to comprehend why these details should be disclosed to BJP President Amit Shah. Lawmakers are public servants and if the exercise is to be invested with probity, the disclosures should be in the public domain.

Indeed, this is a good opportunity for Mr Modi to go one step further and remove the stipulation that, for contributions to political parties of less than Rs 20,000, the identity of the giver does not have to be disclosed. The government could also propose the introduction of a law for a robust disclosure scheme for all parliamentarians, one that is updated regularly. The vehicle for doing so exists in the form of the standing committees on ethics in both Houses of Parliament; the one in the Rajya Sabha was set up in 1997 and the Lok Sabha committee was constituted in 2000 on an ad hoc basis and in August 2015 as a formal body. The ambit of these committees is fairly wide, covering the conduct of MPs, but mostly focusing on the separation of their private interests and public policy. The efficacy, however, of these disclosure regimes is open to question. The committees in either House have different rules of reporting and none of the information is available in the public domain, although it can be accessed through an application under the Right to Information Act. Analysts who have attempted to access such information report disclosures are inadequate or mostly non-existent.

In the Rajya Sabha, for instance, MPs are mandated to disclose their interests under five heads that focus on directorships, shareholding, consultancies and engagement. Worse, compliance levels are abysmal and dated. According to Factly, a website that interprets public data, India is far behind  the US, Australia and Canada that require 12 to 14 disclosures on a periodic basis, including income, assets, transactions and liabilities. Scrutiny is also poor, which is how Vijay Mallya, the discredited owner of Kingfisher Airlines, was allowed to sit on a parliamentary panel that determined aviation policy. A thought-through disclosure law that includes an implementation apparatus and public scrutiny would add considerable heft to Mr Modi’s election promise of rooting out corruption from politics and counter the Opposition’s charge that the government is merely attempting cosmetic changes.

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