THE electoral bonds scheme which came into effect in March 2018 is a brazen and opaque method to funnel corporate funds, kickbacks and black money into the ruling party’s coffers.

That is why the CPI(M) challenged the scheme and the amendments made in the relevant laws in the Supreme Court. The Association for Democratic Reforms also petitioned the Court to strike down the scheme. The CPI(M) was the only party to declare that it will not accept electoral  bonds.

The electoral bonds provides for anonymous donors giving unlimited amounts of money to a political party through designated accounts in the State Bank of India. For this, the relevant laws like the Representation of People Act, the Income Tax, the Companies Act and the RBI Act were amended. The limit of funding for companies, upto 7.5 per cent of the net profit over three years, was lifted. More dangerously, the law was amended to enable foreign companies operating in India to donate to parties.

Since the identity of the donor would be known to the SBI and through this State-owned bank to the government, the corporates and other big donors would prefer to give bonds to the ruling party than to an opposition party. Contrary to the argument of the finance minister, Arun Jaitley, that the scheme removes the fear of donors’ names being made public, the knowledge of the donor’s identity becoming known to the government ensures that bonds will be given mainly to the ruling party.

The result was as expected. Upto November 2018, the BJP got 95 per cent of the electoral bonds issued. This pattern will continue in the bonds issued after the elections were announced.

The other claim of Jaitley that political funding is now coming through legitimate channels is also disproved by the fact that vast amounts of money in cash is being deployed for these elections. Upto April 1, over Rs 1,400 crores in cash was seized by the Election Commission authorities and this is only a fraction of the black money flowing into the elections.

The Supreme Court,  nearly a year after the petitions were filed, has in an interim order asked political parties to provide details of bonds received by them and from whom in a sealed cover to the Election Commission. The Court did not stay the operation of the scheme. Nor has it asked the Commission to divulge the details of the parties’ replies.  It only restricted the duration of the issuance of bonds from ten days to five days in May. The Court will hear the case next on May 30, after the elections are over.

This is a half-hearted and disappointing order, given the fact the Court heard arguments from all sides for three days. The Election Commission in its affidavit to the Court had stated that the changes in law will have “serious repercussions on the transparency aspect of political finance/funding of political parties.” It also said that not reporting the source of the bonds means that it cannot be ascertained whether the political party has taken donation from government companies and foreign sources.

The attorney general in an astounding statement asserted that “the public has no right to know who funds political parties as long as the funding is legitimate.” In the light of the Court’s declared stand of the people’s right to know, the least the Court could have done was to stay the scheme till a final judgment.

Meanwhile, there has been a spurt in funding through electoral bonds in the run-up to the election. According to a reply furnished by the State Bank of India to an RTI query, there has been a 62 per cent increase in electoral bond funding in the first three months of 2019 as compared to the whole of 2018. In 2018, Rs 1,056.73 crore worth of bonds were issued; this year between January to March alone Rs 1,716 crore worth of bonds were issued.  One can expect larger amounts through bonds during the actual election months of April and May. The Supreme Court could have at least stopped this flow by staying the scheme.

It is to be hoped that the Supreme Court will put an end to this diabolical scheme which legitimises big corporate and illegal money funding to the ruling party.

(April 17, 2019)