PCC Delegates

Article XI stipulates that every member of the PCC shall pay an annual
fee of Rs 50 to the PCC of which Rs 25 is to be remitted to the AICC.
Further, every member of the PCC is to collect Rs 100 for the Congress
Fund triennially.

AICC Delegates

Article XIII stipulates that every member of the AICC shall pay an annual
subscription of Rs 100 and shall collect Rs 200 for the Congress Election
Fund.

Recommendations

Active Members

The Committee finds the present provisions concerning contributions
from Active Members cumbersome and impractical. It recommends that instead
there be a simple and straightforward provision that stipulates that
every Active Member shall collect for or contribute directly to the
PCC a sum of Rs 100 per year. The Committee recommends the present pattern
of distribution among the AICC, PCC and DCC be retained: 75% coming
to the AICC, 12.5% going to the PCC and the balance 12.5% to the DCC.

There are at present an estimated 11 lakh Active Members in the Congress.
If this recommendation of the Committee is implemented, the Congress
will be able to raise Rs 11 crore a year from Active Members alone.
This amount is more than sufficient to run the entire Congress organization
comfortably in a non-election year.

The Committee reiterates that the intimate involvement of Active Members
is vital for the continued strength of the Congress and crucial for
the effectiveness of its political mobilization and campaigns.

PCC Members

The Committee recommends that the annual contribution from a PCC delegate
be fixed at Rs 300 to be collected and retained entirely by the PCC.

AICC Members

The Committee recommends that the annual contribution from an AICC delegate
be fixed at Rs 600 to be collected and retained completely by the AICC.

MPs and MLAs

The Committee recommends that all Congress MPs and MLAs make a contribution
of one month’s salary to the Party organization. The contribution from
the MPs will accrue to the AICC and that from the MLAs to the PCC.

Chairpersons and Others

The Committee recommends that all Congress Chairpersons of Boards/Autonomous
bodies and similar designated institutions known by different names
also contribute one month’s salary to be collected and retained by the
PCC.

The Committee recommends that members of municipal corporations, municipal
committees and zilla parishads donate a sum of Rs 200 per year to the
Party from their allowance. This amount should be retained by the PCC.

Ticket Aspirants

The Committee recommends that all applicants applying for party tickets
should deposit Rs 10,000 for Lok Sabha, Rs 5000 for Vidhan Sabha and
Rs 1000 for local body elections. No refund will be given to those who
get the ticket. But those who fail to be nominated will receive half
the amount back. The deposit for scheduled caste and scheduled tribe
aspirants should be half of what the Committee has recommended for all
others. The amount collected from Lok Sabha aspirants should accrue
to the AICC and that collected from the Vidhan Sabha and local body
aspirants should accrue to the PCC.

Penalty for Non-Payments

The Committee recommends that all payment provisions be strictly enforced.
Where possible like in the case of Active Members, PCC and AICC delegates,
default on payments stipulated should automatically invite forfeiture
of benefits of membership or office.

No Multiple Payment

The Committee recommends that in case where a particular person falls
into more than one category from whom contributions are sought, the
higher amount be applicable as his/her contribution to the Party.

Creation of a Congress Corpus Fund

The Committee recommends that a separate corpus fund be created. Contributions
to this corpus should be solicited from companies, well-wishers and
sympathizers of the Congress and also from the general public. The objective
should be to raise at least Rs 50 crore over the next two years for
the corpus of this Fund. The annual income from such a corpus can be
used to finance the Party. The Committee is well aware that it will
not be easy to build up such a corpus quickly. However, the first steps
must be taken now and no effort spared to achieve the objective.

The Committee believes that there is a great desire among the general
public for political parties to clean up their financing systems. If
properly marketed through individual appeals and through the mass media
in a systematic and sustained manner, the public corpus will signal
our commitment to raising money from the general public in a legitimate
manner for legitimate political activities. All payments to the corpus
should be taken only by cheque/draft and be duly acknowledged. Once
the Fund becomes operational, an annual statement of sources and uses
of the funds should also be prepared.

The Committee also recommends that the Congress Party take up with the
central government the issue of making all contributions–individual
and corporate– made to such a corpus (whether it be of the Congress
or any other political party) tax deductible under Section 80G of the
Income tax Act, 1961.

The Committee is of the view that income of all political parties registered
under Section 13A of the Income Tax Act, 1961 should be fully tax exempt
under Section 10 of the Income Tax Act, 1961. The Congress should take
up this matter also with the central government.

Income from Properties

The Committee recognizes that the development and use of properties
owned by the Congress in different states will yield income that can
then be used by respective PCCs. This option should be pursued quickly.

The Coupon System

The Committee deliberated upon the use of coupons for collecting funds.
Such coupons have been used effectively in Kerala. The Committee has
concluded that the coupon system be used in all states but under tight
supervision of the AICC.

Coupons must be used during a few designated periods of fund-raising
campaigns. The Committee recommends a special fund-raising week be launched
every year between December 22nd and 28th (the Congress’s Foundation
Day). Coupons may be issued in denominations of Rs 1000, Rs 500, Rs
100, Rs 50, Rs 20 and Rs 10. PCCs will print these coupons according
to the instructions from the AICC and they will also maintain detailed
accounts. 50% of the money raised by the coupons should be retained
by the PCCs for supporting DCCs and other bodies in the state and the
balance 50% should accrue to the AICC.

The Committee also recommends that each DCC be given the target of collecting
a minimum Rs 1 lakh annually which it could retain. This collection
could be by coupon or cheque with due acknowledgement being given to
the donor. This amount could be retained by the DCC. Appropriate records
of collections made and acknowledgements given should be maintained
and periodically checked by the AICC.

Friends of Congress

The Committee recommends that a major campaign be launched to identify
1 lakh friends, sympathizers and well-wishers of the Congress each year
for a donation of Rs 10,000 each by cheque to be duly acknowledged.

Contributions from Overseas Indians

The Committee has received suggestions that the Congress make efforts
to raise funds from NRIs and overseas Indians.

The factual position is that under Section 4 (1), Chapter II of the
Foreign Contribution (Regulation) Act, 1976 (FCRA), no political party
can accept foreign contributions. Section 4 (2) bars even NRIs having
Indian citizenship from delivering any currency, Indian or foreign,
to any political party.

However, Section 5, Chapter II of FCRA allows an organization of a political
nature but not being a political party, to accept a foreign contribution
with the prior permission of the Central Government. The organistion
can be associated with the activities of a political party.

Thus, under the FCRA, theoretically the Congress Party could (i) establish
a Congress Foundation registered, as say a trust under the Indian Trusts
Act 1888; and (ii) seek permission from the Central Government to mobilize
funds from NRIs for specified functions that the Foundation would undertake
like training, education, publications and conventions. It is clear
from the FCRA that activities of the Foundation alone can be financed
in such a manner.

Contributions from Indian Companies

Currently, political donations by Indian companies to political parties
is permitted under Section 293A of the Companies Act, 1956. There are
three conditions to be fulfilled. The annual donation must (i) not exceed
5% of average net profits during the immediately preceding three years;
(ii) be approved by a resolution of the Board of the company; and (iii)
be disclosed in its profit and loss account of the company. The Confederation
of Indian Industry has suggested that such donations be made tax-deductible
under Section 80G of the Income Tax Act, 1961 and that the decision
of the company’s Board be approved by its shareholders.

The Committee recommends that all efforts continue to be made to raise
corporate donations consistent with Section 293A of the Companies Act,
1956. The Committee also recommends that a dialogue be initiated by
the Congress with industry and trade associations both at the national
and state levels to bring about greater transparency in the flow of
funds from companies to the Party.

State Funding of Elections

Although this issue does not form part of its terms of reference, the
Committee nevertheless feels its necessary to express its support to
the idea of state funding of elections of nationally recognized parties
on the basis of well-formulated norms. In recent years, support for
state funding of elections has grown and the Committee’s view is that
the Congress should take a leadership role in bringing the idea to fruition
soon.