Bonds of corruption

Electoral bonds with their opacity foster corruption

Alok Tiwari

The just-concluded final hearings in the Supreme Court of challenges to Electoral Bonds Scheme have been an eyeopener. It is true political parties of all hues have always relied on anonymous sources of money and they would like to keep it that way. However, what takes one’s breath away are brazenly egregious arguments put forward by the solicitor general on behalf of the Union government in support of the Bonds scheme. As is well known, the Electoral Bonds allow anyone to make anonymous donations to political parties of any amount. In theory, even recipients are not supposed to know who has given them the money. The donors buy bonds worth thousands of crores from State Bank of India and can literally drop them at the office door of the party which can then deposit them in their account and nobody ever asks any question.

This is in the country where a common citizen can be asked source of funds and needs to submit PAN details to the bank while depositing even a paltry Rs50,000 of their own money and information can be shared freely with any agency. Theoretically only SBI will know who has bought the Bonds but there is a catch. The bank needs to share the details in case of a judicial order or on demand from law enforcement agencies. Under a government that has weaponised every law enforcement agency against political opponents, everybody knows what this means. Ruling party will have direct and immediate access to the information.

While defending the scheme, the government has argued that citizens have no explicit right under the Constitution to know the source of funding of parties. This is technically true but specious and it is concerning that government would take such a stand. There will always be plenty of things that are not mentioned in any Constitution or law because framers could not envisage every future development and circumstance that may arise. Human societies evolve. Mores and norms change and technological advances happen creating situations that nobody could have thought of decades or centuries earlier.

The Constitution also does not mention Internet or homosexuals but that has not prevented the government from creating laws to regulate information technology and courts from recognizing gay rights. The way forward is to be found using the spirit of the document and create new laws and jurisprudence. And a democracy should always favour more transparency, not less. There is no explicit Right to Information in the Constitution either but law providing that was enacted and by legislature and endorsed by judiciary in keeping with spirit of openness.

It is almost axiomatic that citizens will exercise better electoral judgment if they know who is giving how much money to which party. They will also know right away if a government has made rules or laws favouring a corporation or business that supported them earlier with hefty donations. It will not prevent governments from favouring their donors but if it is all out in the open, worst abuses will be avoided. One cannot see any downside of it whether or not the Constitution has anything expressly on funding of political parties or elections. It clear as daylight that overall democratic process will only be helped by more transparency.

There is no denying running a political party in any country needs vast amounts of cash. But mature democracies have clear rules about how the citizens and businesses can make political donations. In many countries there are limits on amounts individuals or companies can donate as well as on how much can be spent on elections. Declarations of these sources to citizens is fundamental as voters need to know if big money is being used to influence their political system.

The government has said voiding the scheme will only reinstall earlier system when donations used to be made in cash and often involved black money. This is only partially true. Several corporates had trusts to make political donations and did so officially and transparently. And cash and black money are still being used by everyone at party as well as individual levels in spite of Bonds scheme being in operation for years. Also, government has not spelt out what benefit merely channelling the money through bank brings if everything remains opaque. The hearings brought out the downside of ruling party being in position to track donations, information that it can use to not only benefit friends but to trouble opponents.

The earlier practice of cash donations at least had the benefit of having a level playing field for all. Even ruling party had no means of knowing who has given money to whom. So it was possible for opponents to help a rival party without inviting government opprobrium. This is not to advocate reinstating the cash only donations. If anything, the system not only has to be made more transparent but also stricter for parties. They are notorious for not following even basic norms of submitting their accounts regularly.

These rules need to be tightened and enforced more forcefully with severe penalties for default. India now leads in digital payments. In an environment when even roadside vendors accept digital payments of small sums, it should not be difficult for Election Commission to mandate that parties receive and spend money only digitally so full money trail is available for scrutiny. These must be regularly published on parties’ websites and any citizen should be able to look up how funds came to and were utilized by the parties. If publicly listed companies can have rules for full disclosure norms, why should it be different for parties that claim to serve the public? One hopes Supreme Court and Election Commission will both bat for greater transparency and citizens’ right to know when they rule on the matter.

Published in Lokmat Times on Nov 5, 2023