Fighting corruption, or checking electoral malpractices for that matter, is a common cause. Every individual in his or her right frame of mind will gladly support any governmental endeavour in this direction. To that extent, the stated aim of the Centre’s move to introduce electoral bonds for poll funding is prima facie a good step forward. But, the devil is in its details. It needs careful scrutiny as to how helpful this measure will be, given the complexities involved in the process of election funding itself. As Union finance minister Arun Jaitley stated in the Lok Sabha Tuesday, the idea is to introduce electoral bonds that can be purchased across the counter at government-owned State Bank of India (SBI) — the lead bank under the over-lordship of RBI. Political parties can encash these bonds they receive as donations from individuals and enterprises through the SBI via their designated bank accounts. Conditions apply; like there are specific days in specific months when such bonds can be purchased, and these bonds will have a validity of no more than 15 days.
The government claims that this will ensure that donations received by political parties will be on record. Such a premise itself is based on false assumptions. This is for the reason that the money spent by a political party or candidate in election campaign has been a matter of speculation. The records submitted to the election commission after the polls are fictitious, and the real extent of money spent will be multiples of what is put on record. Underhand dealings take place and will certainly continue to do so. Donors so far made the payments to parties to an extent by bundles of currency notes and partly by cheques. There is nothing yet to suggest that this two-way payment would not continue after the introduction of the electoral bonds. This would mean the corrupt will not stop dead in their tracks because of some bill getting passed by voice vote. Rather, the scenario might turn worse hereafter. In the present system, there existed transparency in the matter of donations to the extent of upto 60 per cent of the recorded donations. With the introduction of electoral bonds, this transparency also is going to be lost for the reason that the donors need not state the name of the party for which they purchase the electoral bonds, though the payment will form part of their balance sheets.
There is no way the general public would know who paid how much to one or the other political party. At the same time, the bank that issued the bonds will know who purchased how many bonds and which party ultimately got them. This will be to the advantage of the ruling party as it can get to know things from bank records. Knowing as much, donors will be scared of giving donations to parties other than the ruling party, as they will have to face the wrath of the ruling establishment. This will result, in another convoluted manner, in lobbying through the back door. Lobbying, which is presently illegal in India, will become easier and the general public will never come to know how much money was transacted by foreign entities who, due to their unique positioning, will be able to buy these Bonds in India and put the figures in their balance sheets in their home countries.
To tackle any possible problem arising out of this, the present government has already amended, in the Finance Bill 2016, the Foreign Contribution Regulation Act (FCRA) with retrospective effect from 2010 By introducing the electoral bonds system, it can be safely assumed that some 60 per cent transparency that existed so far in recorded funding for poll campaigns will be lost. The clandestine funding for polls will continue, on which the government or Election Commission has no control so far, and it might remain so even after introduction of the bonds too. The only control they can think of, in very Indian fashion, is to put up road blocks and police check points prior to and during elections. It is for this reason that black money changes hands through multiple channels even as transactions through banks have been made more stringent in recent months. This will remain so unless and until a nation does away with the currency system altogether.
This is not an illness limited to India and its political system. This is prevalent across the world and in every type of government, democratic or otherwise. It would appear that our government proposed this electoral bond system — the first mention of which was made in the last Budget speech of Jaitley in February 2017 — is either motivated by the ruling party’s vested interests, or is too clever by half. The purpose for which this new system is being introduced is unlikely to be served, and likely to be defeated. The claim of the finance minister is that Opposition parties would benefit in the event of disclosures vis-a-vis bonds, as disclosures tend to be largely against the ruling party in any given circumstance. This sounds illogical and immature, to say the least.
