As India gets down to electing the next set of parliamentarians, the Income Tax department and agencies like the Enforcement Directorate will likely remain busy detecting and confiscating ill-gotten and unaccounted for cash — from political leaders and their supporters — over the next six weeks.
With that, news reports about raids on houses or offices of one or the other political leaders, their aides, workers or fixers will become more frequent, as they often do, while opposition parties too would raise their pitch about the acts being motivated by “political vendetta”. In this election season at present, it is the Congress that finds itself facing the brunt. The party has alleged that the I-T raids conducted at locations and against people linked to Madhya Pradesh chief minister Kamal Nath have been to cripple its election campaigning.
This had led the Election Commission to ask the finance ministry to act in a non-discriminatory manner, which indicates that raids by the ED and the I-T department during elections can take on political undertones.
The opposition fears are not without any basis, either. One just has to recall what the ED and the I-T department did to Mayawati’s Bahujan Samaj Party (BSP) immediately after the demonetisation and just before the Uttar Pradesh assembly elections in February-March 2017.
On 8 November 2016, Prime Minister Narendra Modi announced the recall of India’s 86 per cent high-value currency notes (Rs 1,000 and Rs 500). Everyone — from individuals to corporates, businessmen to political leaders — was supposed to return the banned currencies of these two denominations to the banks. So was the BSP.
On 26 December that year, ‘information’ was leaked to news agencies that the Enforcement Directorate had ‘detected’ cash deposits of Rs 104 crore and Rs 1.43 crore in the bank accounts of the BSP and Mayawati’s brother Anand, respectively, maintained at the New Delhi-based branches of the United Bank of India. The ED handed over the inquiry to the I-T department. Media reports, coming up again a fortnight later — this time about the ED detecting the deposit — carried the same details and appeared to give an impression that the BSP had deposited “suspicious” or black money into its bank account.
Next day, Mayawati held a press conference to say that the completely accounted for cash belonged to the party and was deposited after following all the procedures. She alleged that the investigating agency was working at the behest of the BJP government, and also challenged the BJP to disclose its deposits made 10 months prior to the demonetisation.
A week later, on 4 January 2017, the Election Commission announced the dates for the assembly elections in the Uttar Pradesh, where the BSP was the principal opposition party at the time. With the money in its primary UBI account under the scanner of the ED and the I-T department, and therefore unusable, the BSP was forced to fight the election with whatever little money it had.
The election result was declared on 11 March 2017 and two days later, the RBI ended the withdrawal limit on savings accounts. Post demonetisation, the RBI imposed different withdrawal limits because there were not enough new currency notes in circulation.
So, the largest state of the nation went to poll, when the impact of demonetisation was at its peak, the candidates and the political parties were unable to withdraw sufficient cash from their banks, and the BSP faced the most difficult time because it couldn’t spend its own money. That was an uneven playing field for Mayawati’s party.
It is somewhat curious that a large, cash-rich political party like the BJP deposited only Rs 4.75 crore after the demonetisation. Post-demonetisation, barring the BSP’s, none of the political party’s bank accounts were investigated for the cash deposits.
As political parties gear up for national elections starting this week, opposition parties have a legitimate concern about the IT raids being conducted on their members and their aides – especially because the EC conducts its own investigations into dirty cash anyway during the campaign.
The author is a senior journalist.