Bonds in Question

In yet another landmark judgment the Supreme Court on February 15 struck down the controversial Electoral Bond (EB) scheme introduced by Prime Minister Modi in 2018. One of the purposes of the bond plan was to curb black money in electoral politics. In truth, it was a nice device to make black money white. The apex court held that the electoral bond scheme by anonymizing contributions to political parties infringes upon the right to information of the voter provided under Article 19(1) of the Constitution. These bonds must be bought from the State Bank of India (SBI) but can be donated to political parties anonymously. Here lies the crux of the matter. In 2019 the Election Commission of India [ECI] described the system as a retrograde step but did nothing for the enhancement of transparency and accountability. With the Electoral Bond Culture in force, the big business houses were happy because they found in it a unique opportunity to indulge in money laundering through their shell and loss-making companies. Not for nothing Modi is the darling of corporate bosses.

Since 2018, secret ‘well-wishers’ are said to have donated 16,000 crore rupees [more than $ 1.9 billion] to political parties through the bond scheme. As per estimates of the Association for Democratic Reforms (ADR), a non-governmental organisation, the Bharatiya Janata Party (BJP) is the main beneficiary of Bond Bonanza as 57 percent of donations between 2018 and March 2022 went to their coffer. The next largest party, the Indian National Congress received 9.52 billion rupees (about $ 115 m). As SBI is the sole selling agent of these bonds, the party in power, has complete sway over the process. Donors think twice before patronizing opposition parties.

In 2017 and later in 2018 ADR, Common Cause, and the CPM filed two separate petitions in the Supreme Court urging it to put an end to the EB system. And the all-important top court ruling came in February 2024, just before the crucial general elections. All parties have started election campaigns in their way and they need money. Cash for vote is a time-tested practice in many backward areas.

For one thing BJP has all the money and it matters a lot in swinging the election pitch in its favour. It is the biggest election enterprise investing a lot in propaganda and doles. It is now an open secret that some of the top Indian monopoly houses get special treatment from the government. Officially they say the notorious ‘licence and permit raj’ has gone with the Congress but in reality, it is very much there and EB is the source of favouratism in allocating government contracts. It begets corruption in refined form.

EB allows unlimited donations by companies which is ‘antithetical to free and fair elections’. This would authorise ‘unrestrained influence of companies on the electoral process and violates the principles of free and fair elections and political equality’, denying level playing fields for all.

The impact of this judgement is far-reaching, no doubt, but what will happen in the real world is anybody’s guess. The way elections are funded in India is unlikely to change for the better because the Election Commission in league with paramilitary forces at the tacit approval of the party in authority, hardly plays its neutral role. The Commission across the country has been extremely disappointing.

Those who think the SC verdict is a serious blow to the BJP are actually nursing an illusion. It won’t affect the party much because it is in absolute power as the Congress was for 20 years before them. The Election Commission expressed its willingness to follow SC’s instructions on electoral bonds but it failed to categorically state when the details of the Bonds will be made public.

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Vol 56, No. 36, Mar 3 - 9, 2024