Allowing electoral bonds is a letdown for the voter

The Supreme Court, by failing to stop the issue of electoral bonds from April 1, has once again wasted a golden opportunity to clean up institutional corruption.
Supreme Court (Photo| Shekhar Yadav, EPS)
Supreme Court (Photo| Shekhar Yadav, EPS)

The Supreme Court, by failing to stop the issue of electoral bonds from April 1, has once again wasted a golden opportunity to clean up institutional corruption. It was a scheme announced by then Finance Minister Arun Jaitley, while presenting his 2017 Budget, and implemented in January 2018. He positioned electoral bonds as part of his reforms in political funding, and described it as a measure to cleanse the system.

But this Kafkaesque logic was exactly opposite of true intent. Electoral bonds are meant to erect an opaque wall to keep the donors of political funds anonymous, while legalizing such donations. In rejecting the plea for stay by the Association of Democratic Reforms (ADR) of these electoral bonds ahead of the elections in 5 states, the apex court has used a tautological argument.

amit bandre
amit bandre

Justifying dismissing the challenge to electoral bonds, the court said: “.In the light of the fact that he Scheme was introduced on 2.1.2018; that the bonds are released at periodical intervals in January, April, July and October of every year; that they had been so released in the years 2018, 2019 and 2020 without any impediment; .we do not see any justification for the grant of stay...”

SLIPPING TRANSPARENCY

The electoral bonds were released “without any impediment” because the apex court refused to give a hearing to the petitioners all these years. The petitions were filed way back in 2017 soon after announcement of the scheme, and once the details were put into practice in January 2018, the petitions were updated and again moved.

Over all these years these petitions have not been heard. By this logic, if a few more series of the electoral bonds are released by the government, the petitioners may have to kiss goodbye to a final hearing! The process of scrubbing dirty money via a political donation is simple: The donor buys electoral bonds in various denominations from any notified branch of the State Bank (SBI), and gives it to the political party of his choice.

The receiver then has 15 days to cash the bonds. The only safeguard is: the donor has to give his ID details to the SBI at the point of purchase. T h e p e r s o n wh o remains in the dark is the voter. He never comes to know from whom a par t y receives its donations; and how much. Perhaps the court should have taken heed of the slipping transparency levels in the country. Transparency International, that brings out a corruption perception index for 180 countries, released its findings for 2020 in January this year. It showed India had slipped 6 places to 86th spot in the ‘corruption index’. Not very flattering!

RBI, EC IGNORED

The Supreme Court also seems to have ignored significant objections by two important institutions - the RBI and the Election Commission. The EC, in 2019 had filed a counter-affidavit in the case calling the anonymous electoral bonds a “retrograde step as far as transparency of donations is concerned.” The EC has also pointed out that by the amended Section 29C of the Representation of Peoples Act, every political party has to report donations above `20,000. This should obviously cover donations through electoral bonds too, but it doesn’t! In respect of the Reserve Bank, the apex court only seems to have taken note of RBI’s opposition to the electoral bond format as a physical scrip while pressing it should be of demat form. If it had dug deeper, the court would have found that the RBI had vociferously objected before the scheme was released as part of the 2017 Budget presentation by Arun Jaitley.

The Finance Ministry, which had got the note from the Reserve Bank in January end, 2017 dismissed it with the endorsement that the RBI had not understood the scheme, and that it was too late to consider before the budget. In its 30 January letter, the RBI had said that the electoral bonds would set a “bad precedent” and that it would encourage money laundering. It also stated that electoral bonds would become another type of ‘bearer bonds’ whose ownership would be difficult to trace.

The top court also commented that it is not always the ruling party that has benefited from the electoral bonds. However, of the `6,128 crore worth of electoral bonds issued so far since January 2018, the lion’s share of 90 per cent has gone to the BJP. In the last issue in January 2019, just before the Lok Sabha elections, `1,450 crore worth of bonds were cashed by the BJP, as compared to the Congress which only managed `383 crore. The Supreme Court is still to hear the case against electoral bonds finally on merits. When it does, hopefully it will consider the rights of the voter to transparency; and the misuse such a scheme allows for the party in power to milk funds from doubtful quarters.

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