In a bid to ensure financial transparency and discourage corruption among political parties, the Election Commission has proposed that political parties be provided with funds from the state on their electoral performance. 

In a draft Political Party Related Act-2072, the EC also makes it mandatory for political parties that they be audited by the Office of Auditor General. 

“We have proposed that parties be provided with funds from the state. It will come into force as soon as Parliament endorses it,” said Acting Chief Election Commissioner Ayodhee Prasad Yadav. 

The EC started bringing political parties’ finances under scanner since 2012. 

The EC has already held consultations with former commissioners and legal experts. “Key stakeholders and political parties will be consulted soon before we forward the draft to Parliament,” said Yadav. 

In order to check increased number of parties, the EC has also suggested a threshold of minimum 1.5 percent votes for the parties to be eligible for state funding. 

“Since the number of parties is rapidly increasing, a threshold will discourage the tendency to split parties or form new ones,” said Yadav.

The EC, however, is still considering the amount that the parties should get from the state. The EC will forward the bill to the Cabinet right after it sets the criteria. 

EC, a constitutional body, came up with the idea after international corruption watchdogs, including Transparency International, termed Nepal’s political parties “most corrupt institutions” with their sources of income and expenditure remaining undisclosed.

Once the proposed law comes into force, EC officials believe it will be able to act effectively to hold political parties more accountable and make them transparent. 

However, this is not a new idea in itself. 

In 2003, the then the finance minister Prakash Chandra Lohani had proposed grants from state coffers to parties on the bases of their popularity and annual programmes. Lohani had proposed grants of Rs 20 per vote each party obtained in general elections.

The national budget had proposed releasing the grants two months before an election. In the budget speech, Lohani had mentioned that all the political parties enjoying state funds would be required to furnish their annual income-expenditure statements and audited balance sheets to the EC.