Ever since Demonetisation was announced, cry for electoral reforms has only grown strong. The Election Commission of India has identified nearly 200 political parties that exist mostly on paper. These parties misuse exemptions provided by Income Tax Act to convert black money into white money. However, Election Commission has decided to clamp down heavily on these money laundering outfits.
The Election Commission has decided to write to CBDT (Central Board of Direct Taxes) informing it about decision to delist about 200 parties as many of them could be money-laundering operations.
The EC said that there are parties which have not contested any election since 2005 and exist on paper only. The EC feels that action must be taken against them to ensure adequate transparency in the flow of funds.
Meanwhile, Finance Minister Arun Jaitley has said that the government was planning to set a threshold criteria for political parties to enjoy tax exemptions to check money laundering by outfits that do not contest elections.