‘Electoral Bonds don’t augur well for our democracy’

Electoral bonds, introduced by the Narendra Modi government, have attracted criticism from various quarters for their opaqueness – India’s millions of ordinary voters will never know the identity of those who are donating large sums of money to the political parties, especially the ruling BJP. The latest data show that electoral bonds have become the preferred route of political donations. Almost two-thirds of the Rs 3,696.62 crore received by the BJP and six other prominent parties, in 2018-19 were through electoral bonds. Transparency activist Venkatesh Nayak tells DH’s Shemin Joy that electoral bonds are a danger to our democracy.

Q. Why do you have a problem with electoral bonds?

A. Electoral Bonds mark a reversal of the trend of increasing transparency in political party funding. Under NDA-I (Atal Bihari Vajpayee), the election laws and rules were amended to make donations above Rs 20,000 to political parties transparent and accountable. The identity of donors was made public through their annual contribution reports to the Election Commission, which proactively disclosed them to the public on its website. Under the Modi government, the opposite has happened. Fewer and fewer donors are making donations through transparent methods as those making big donations prefer the opacity of electoral bonds. This does not augur well for our parliamentary democracy. People have the right to know who makes large scale donations to political parties.

Q. Why is it important for voters to know who funds the parties?

A. Big donors do not give funds to political parties out of generosity. Often, there is a quid pro quo, especially when the party to which they donate comes to power. So, people should know which donor can be linked to which decisions of the government that they benefit from.

Q. How do electoral bonds affect transparency?

A. Due to electoral bonds, the identities of individuals, corporates and other institutions who have given donations of more than Rs 6,000 crore since the launch of the scheme are not known. Unlike gifts that private citizens give to each other which might not have a public interest element, donations made to political parties are aimed at financing them to fight elections to form the govt and/or represent not only the donor but also the citizenry. So, there must be transparency of all large-sized donations. Moreover, corporate donations are made not from individual pockets but from profits earned through commercial operations. So, shareholders of companies have the right to know where their money is going. The amendments made to the Companies Act in 2017 (to bring in the electoral bonds scheme) take away this right.

Q. Do you agree with Opposition parties’ claim that this route in effect plugs their funding sources?

A. Available data indicates that the ruling BJP, which floated the scheme, has cornered a lion’s share of donations made through this route. This, coupled with the fact that the Income Tax Department sent notices to people who donated to AAP a few years ago, raises genuine concerns about the intentions of the government. Moreover, no donor has come forward to say that he/she demanded anonymity for making donations, which is what the government claimed as the reason for introducing the electoral bond scheme in 2017. So, who has driven political funding in India onto this opaque route is still a mystery.

Q. Despite opposing it, several parties receive funds through these bonds. What should they do?

A. All political parties that oppose electoral bonds must publicly pledge not to accept donations through that route. Other transparent methods like cheque, demand drafts and digital transfers do not create any disability for donors. This will put pressure on parties that accept electoral bonds to do a rethink. CPI(M) has refused to accept electoral bonds. However, if the Supreme Court declares the electoral bonds as violative of the principle of transparent political funding, which is the bedrock of a responsible democracy, then electoral bonds will die a natural death.

The Supreme Court has again refused to grant a stay on electoral bonds. Delhi elections are scheduled now. Do you see this as a setback?

It is indeed a setback. The legality of electoral bonds is in question before the Bench. Postponing a decision on this issue only lends greater legitimacy to electoral bonds as a source of political funding when there is a wealth of data in the public domain about its opacity and how it has benefited one political party at the expense of others. Electoral bonds skew the level playing field to which political parties are entitled in terms of receiving funds from donors.

Q. Can Opposition parties take a stand that they will not take money through electoral bond route? Is it feasible?

A. CPI(M) has already done it. Others need to emulate this pro-transparency gesture.

Q. What is the role of the EC in this issue?

A. The Election Commission must add its weight to the opposition against electoral bonds in a consistent manner. They said so during the consultations on the draft electoral bonds scheme, as revealed in court and through RTI interventions. They must not resile from this position.

Q. Is State funding of elections a possibility or a way out?

A. There are pros and cons to State funding of political parties. This must be decided through a well-informed and widespread debate involving the voters and taxpayers who actually bear the brunt of State funding. Any such mechanism will succeed only if illegitimate sources of funding to political parties and candidates are curtailed through legal and executive measures. Money power has influenced electoral outcomes for most of India’s independent existence.

This must come to an end if elections are to be held in a free and fair manner.