EC Should Monitor Stock Market Trends, Forex Rates to Spot Money Laundering During Poll Campaign: Sarma

New Delhi: As money power gains an upper hand in the electioneering process in India, leaving no room for a level-playing field for the contesting political parties, there is need for the Election Commission to monitor stock markets and foreign exchange rates to detect any money laundering during the campaign. This has been sought by former top bureaucrat, EAS Sarma, in an open letter to the Chief Election Commissioner (CEC) Raijiv Kumar on March 13, 2024.

Flagging a report published in The Economic Times, titled “Billions of dollars may chase Indian stocks in election season”, the former secretary to the Government of India, in an open letter to the CEC on March 13, wrote: “Unless the Commission keeps its eyes and ears open to monitoring the flow of money from illegal sources to the political parties, it cannot preempt electoral corruption.” He said the EC could take help from experts from regulatory authorities, such as the Reserve Bank of India or the Securities Exchange Board of India.

Urging the EC to act fast and “with determination”, Sarma said it the independent institution was “obligated under Article 324 and the election laws to initiate proceedings against those violating the expenditure ceiling. If the Commission fails to act, I am afraid, it amounts to the Commission becoming a party to it!”

Read the full letter below:

To

Shri Rajiv Kumar

Chief Election Commissioner

Dear Shri Rajiv Kumar,

India’s electioneering has become inordinately expensive with political parties resorting to money laundering, hawala transactions etc. to fill their opaque coffers to fund electioneering through illegal means. It is widely known how they have resorted to buying elected representatives openly to remain in power. Unless the Commission keeps its eyes and ears open to monitoring the flow of money from illegal sources to the political parties, it cannot preempt electoral corruption.

I wonder whether the Commission has seen a report  on one such trend visible in the stock market indices (https://economictimes.indiatimes.com/markets/stocks/news/billions-of-fii-dollars-may-chase-indian-stocks-in-election-season-heres-why/articleshow/108421283.cms).

I am not sure whether the Commission has the inclination, willingness and determination to prevent the flow of illegal funds into electioneering. I suggest that the Commission takes help from experts to help it in containing such flows. The Commission should not hesitate to take help from regulatory authorities such as the RBI and the SEBI.

I had pointed out several times in the past, instances of individual candidates incurring expenditure in excess of the prescribed ceilings, which under the election law amounts to outright electoral corruption. In such cases, the Commission is obligated under Article 324 and the election laws to initiate proceedings against those violating the expenditure ceiling. If the Commission fails to act, I am afraid, it amounts to the Commission becoming a party to it!

One expects the Commission to act fearlessly in such matters as highly expensive electioneering does not reflect well on the effectiveness and credibility of the Commission as a Constitutional authority.

May I call upon you to act fast and with determination?

Regards,

Yours sincerely,

E A S Sarma

Former Secretary to the Government of India

Visakhapatnam

 Courtesy: Countercurrents.org