When electoral bonds were introduced in 2018, the rationale was that it would help clean up untraceable cash funding to political parties. The Election Commission has now pricked the premise, calling it “a retrograde step as far as transparency is concerned”, which needs to be scrapped.
The objections raised by the NGO Association for Democratic Reforms and EC merit a close look. The EC in its affidavit in the Supreme Court said electoral bonds would make political funding opaque with serious repercussions for transparency of political funding due to anonymous donations, especially with the removal of cap on corporate funding.
That, such funds—untraceable due to amendments in the Foreign Contribution (Regulation) Act, Finance Act 2017, Income Tax Act, Representation of the People Act, 1951 and Companies Act—could lead to the influencing of Indian policies by foreign companies, is the larger fear.
It’s been argued that with neither the contributor or receiver required to disclose the identity of the other, the inevitable consequences of these amendments is the destruction of principles underlying Article 19(1)(a) and the concept of democratic institutions.
The amendments also dilute the provision of mandatory reporting of donations to the EC while being violative of Sec 29-B of the RP Act, which prohibits such donations.
Under the electoral bonds scheme, bonds in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh and Rs 1 crore can be bought through a designated bank and donated to a political party of choice.
The bonds can be cashed via party verified account within 15 days. Every party registered under the RP Act will be allotted a verified account by the EC, only through which the bond transaction can be done.
For donations up to Rs 20,000, no verification procedures are required, while transactions above it—mainly from big private and corporate accounts—cannot be identified. The scope for corruption is obvious. The situation does warrant a critical look. It only serves the nation’s cause if the political system is sanitised of corruption.