In an expected move the country’s national Bank-State Bank of India, “Citing operational difficulty”, has moved the Supreme Court for “extending the date to submit details of electoral bonds till June 30, 2024”. Earlier the Court had asked the bank to submit the details of the donor and recipients of the Electoral Bonds by March 6 while quashing the scheme through an order of February 15 on the grounds of it being “unconstitutional” and in violation of Right to Information under Article 19 (1) (a).
No prizes for the guesses for who is going to be affected most or who is the biggest beneficiary of the electoral bond scheme once the SBI makes public the details as required by the Supreme Court while scrapping the electoral bond. The scheme was a unique one in camouflaging political donations, from all and sundry as details of the donor and the beneficiary were not in detail to the public.
The list as A political time Bomb?
The SBI’s plea, obviously emanating from the Finance Ministry which controls the bank, comes out of the ruling parties and the governments discomfiture in opening a Pandora’s box, which will unmask the “clean” face of the party, the government and even the central agencies investigating all and sundry for financial issues across the country. Remember this is a country where asking a potential donor to deposit Rs two lakhs with an organiser of a meet by an aide of the then Defence Minister George Fernandes led to the Minister himself losing his job. Adding to the discomfort of the enforcement agencies is the report that companies under investigation by them have donated Rs 500 crores to the ruling party. A detailed list of electoral bonds as demanded by the court can be a ticking political time bomb for the political parties, especially the ruling regime.
Such details appearing in the public on an election eve can be damaging for any political party in charge of these investigations and more so a ruling party which claims to be clean in their dealings and vowed to eliminate all political corruption.
SBI under pressure?
February 15 order of the Supreme Court to scrap the Electoral Bonds scheme and the directions to SBI to submit details under a deadline just before the general elections was expected to stir the political nest when the biggest beneficiary as per the audit reports has been the ruling party since the electoral bonds scheme was launched in 2017-2018. The SBI’s submission during the time of general election was crucial as the Court’s order had opened the issues of accountability and transparency about the sources of funding for political parties. It seems SBI, a wholly owned Bank of the Central government, is under pressure not to open a Pandora’s box on the eve of general elections falling in 2nd quarter of the year.
Electoral bond scheme was proposed by former Union Finance minister Arun Jaitley, while presenting the 2017-18 Union Budget, in order to “cleanse the system” of political funding. He maintained then that even after 70 years of Independence, “the country has not been able to evolve a transparent method of funding political parties which is vital to the system of free and fair elections.”
Lack of transparency says Supreme Court
Ironically, the electoral bonds scheme was struck down by the Supreme Court for the very reasons for which these were introduced i.e to “bring transparency to the system of political funding” in India. The scheme came under scanner for having become an instrument of ‘legalizing’ political corruption as it not only gave anonymity cover to the donor while also taking away the upper limit of donation but also giving exemptions in tax beside other objections. The Chief Justice of India DY Chandrachud called the electoral bond scheme “unconstitutional and arbitrary”, categorically saying that it may lead to a “quid pro quo” arrangement between political parties and donors.
Chequered history of political funding
Political funding in India has a chequered history. During the National Democratic Alliance first regime, we saw the ruling BJP’s president caught on camera accepting donations and being forced to resign. From the Mundra Scandal during Congress regime in 1970s till today, political parties have a difficult time explaining their source of funding. Other than the communist parties, no one makes open collections from people too. That makes their funding mechanism always under a cloud, more so when they are in power and can ensure funding through omissions and commissions of the ruling establishment in various dealings. That explains the discomfort of the present ruling regime too in disclosing the entire list of donors and beneficiaries of the electoral bond scheme, whose biggest beneficiary is the ruling party itself. Once the list is out as per the Supreme court ruling ( first deadline of 6 March, is now being pushed by SBI to after elections in May) there will surely be a controversy over names in the list as many investigated by the various enforcement agencies are bound to find their name in it. Maybe some of the fugitives who left the country, who knows.
Political parties have multiple sources of funding, but, accountability and transparency of funds not only affects the running of the administration and policy making but also has a deep impact on the fairness of the electoral and democratic process. It is essential to have comprehensive and transparent accounting methods and systems which should reveal the true financial position of the parties. The ruling party has much bigger responsibility for maintaining transparency and accountabilities of political funding or donations to ward off the expectations of favours in lieu of the donations or financial support, as has been the apprehensions of ‘quid pro quo’ expressed by the Chief Justice of India.
The biggest paradox with the Electoral Bond scheme has been the anonymity of the donor when these were proposed to “cleanse the system” of political funding. According to the Election Commission of India (ECI) letter dated 19th November 2014 it was made mandatory for every political party to submit an audit report to it every Financial Year (FY). However, analyses of the audit reports of the FY 2022-23, submitted to the ECI by various political parties it emerged that electoral bonds, given the anonymity provided to the donor, were the most popular mode of donations to National Political parties for FY 2021-22 and also 2022-2023.
The main reason behind the apex court’s ruling to strike down the electoral bond has been because it hindered the right of the citizens to the information of the source of political funding and thus hindered transparency and accountability. This is essential in accessing the real inspirations being the various policy formulations to awarding of major contracts by the administration.
Three big beneficiaries
According to the information provided to the Association of Democratic Right under RTI, the biggest source of funding to the political parties, 49% of the total income of three national parties BJP, INC, AAP came from the electoral Bonds. As per the annual audit report total income of six national parties through various sources from across the country in FY 2022-23 was 3076.882 cr. Comparing the two parties, BJP had the largest share of this income with 76% (2360.844 cr) and the Congress had 14.70% (452.375cr). Out of 2360.844cr of BJP’s income, the main source, 2120.0642 cr was through the voluntary contribution or bonds which was 89.801%. For the Congress out of the total income of 452.375cr the income from grant/bond/donation constituted 268.6278 cr i.e 59.38%.
Above figures are important for the understanding that the main source of income for the main political parties across India have been from the electoral bonds or donations which are largely from undisclosed or anonymous sources. If we look at the figures as to where the most of this money was spent this would further help us understand why it is important to have accountability and transparency about the source of political funding. Out of its total income of FY 2022-23 BJP spent 1092.1558 cr in election expenditure and propaganda whereas INC spent 192.556 cr in election campaigns and propaganda.
For the past six years since the Electoral Bonds were used by anonymous donors to pay these political parties a major amount was naturally driven towards the ruling party. According to the declaration available on the ECI website, during the six years of the practice of the scheme BJP turned out to be the biggest beneficiary with 57 % electoral funds and the Congress the distant second with 10 % and others compromised with the rest of the money. This is no deviation from the norms as the ruling party has always been the biggest beneficiary of political funding.
As is evident from the above data, a major portion of this fund is used in election campaigning and propaganda. With such arrangement there are two ways how the democratic process of the country is hampered-the anonymous source of funding gives a big room for the scope of corporate influence on the policy matters and if the major portion of this funding is spent for the propaganda and election campaigns this can possibly further hamper the right to true information and opinion building which is necessary while people choose to vote.
