Kudos to the public-spirited ‘accountability’ NGOs like Association for Democratic Reforms (ADR) and Common Cause who stayed the course to stop the Electoral Bonds scheme; and to the Supreme Court for seeing through the delaying tactics. Had the donours and beneficiaries list been released after the elections, they would have been irrelevant.
For all his astuteness as a firefighter and a legal eagle, late finance minister Arun Jaitley will be remembered as the author of this dubious scheme. It was introduced in 2018 with the grandiose aim “to ensure clean tax-paid money is coming into the system….” But, as the apex court has held, it was but a smokescreen to legalise opacity.
Of the Rs 16,518 crore worth of electoral bonds (EBs) purchased since 2018, the first list published by the EC of 12,155 crore shows some interesting trails. There is Megha Engineering, the secondhighest buyer of Rs 966 crore worth of EBs. It has got plum contracts like the Rs 14,400 crore Thane-Borivali Twin Tunnel Project and earlier the Kaleshwaram Lift Irrigation Project in Telangana. Quid pro quo?
Or the little know Future Gaming? At Rs 1,368 crore, it is the biggest purchaser of EBs. In April 2022, after Enforcement Directorate (ED) raids, it donated Rs 100 crore in EBs. Arm-twisting?
Western democracies
There is nothing wrong with political parties receiving donations as long as it is public who the donors are. After all political parties are large institutions with complex networks and incur big expenses. In the U.S., it works the other way – the strength of a candidate is gauged by the campaign funds the person can muster.
According to US’ Federal Election Commission (FEC), till last month all the 2024 presidential candidates together had raised $381 million.President Joe Biden was in the lead with $90 million, followed by his Republican challenger Donald Trump at $80 million.
Nikki Haley, who was the last to pull out for the Republican nomination race, didn’t do too badly raising USD 36 mn.
The US has good transparency rules but its not the epitome of democracy where ‘dark’ funding is concerned. Private fund-raising is built into the system. Candidates are allowed to raise upto $3,300 from individuals, while party committees can raise up to $41,300, as long as the name and occupation of the donor is conveyed to the FEC.
Though corporations and lobby groups are restricted from directly funding candidates, a series of US Supreme Court judgments has now made it possible for them to spend ‘soft money’ almost limitlessly through political action committees or ‘Super PACs’ through advertising campaigns, etc.
For instance the rightwing pro-gun group, the National Rifle Association (NRA), spent $50 million backing Trump and his other Senate candidates in 2016. The NRA is such a powerful voice in US politics that it is virtually impossible to bring in any serious gun control laws.
It is estimated $14 billion was spent in the US presidential campaign in 2020, the most expensive election so far. Commenting on money power undermining democracy, the Brennen Centre of Justice said “big money dominates U.S. political campaigns to a degree not seen in decades” and is “drowning out the voices of ordinary Americans.”
Germany on the other hand has a sophisticated system that allocates taxpayer funds to political parties that have polled at least 0.5% of the vote to the European Parliament or the Bundestag. Allocation of funds are based on the strength of the party: 0.83 euro for each valid vote ; and 0.45 euro for each euro received from other sources like membership dues, or legal donations.Parties must account for their assets and for the sources and use of their funds.
Corporate, public money
Back in India, with the EBs gone, the Election Commission will need a new legal regime to track political funding.The breach of the ‘right to information’ was at the core of the apex court holding the electoral bond scheme ‘unconstitutional’.There is no harm in corporations, or lobby groups contributing to political parties. But let it be known where the money is coming from. For voters, it will be a fair indication who the party will work for.
A mix of public funding, like the German system, along with corporate contributions, could be a good way forward. Direct corporate funding of parties may create dangerous quid pro quo anomalies; but a regulated single corpus from which political parties are allotted monies based on their strength,can be a workable formula.Individual Indian corporates have successfully experimented with this.
In our twisted democracy there is a yawning gap between the rule book and reality.Individual Lok Sabha candidates can now spend up to Rs 95 lakh depending on the size of the state.
The expenditure in the 2019 Lok Sabha polls is estimated at Rs 60,000 crore. That’s an average of about Rs 500 crore for each of the 543 constituencies that went to the poll. For the coming elections, total expenses will exceed Rs 1 lakh crore.Then there are post and pre-poll hidden costs – like engineering defections after the elections.
Myriad costs will be below the radar and may never enter the public realm. But in respect of the small world of institutional funding, let there be a transparent code.