To the poll booth, with no donor knowledge

Syllabus: General Studies Paper 2

Context

Late last year, the Union government authorised the SBI to issue and encash a new tranche of electoral bonds, the 19th such parcel since the scheme’s notification in 2018.

• The timing of the announcement was predictable, with elections slated to be held to five different State Assemblies beginning next month.
• Now, as a result, voters in those States will go to the ballot box with no knowledge about the donors backing the various contestants.

Electoral bond Scheme:

• It is designed to allow an individual, or any “artificial juridical person”, including body corporates, to purchase bonds issued by the State Bank of India during notified periods of time.
• These instruments are issued in the form of promissory notes, and in denominations ranging from ₹1,000 to ₹1 crore.
• Once purchased, the buyer can donate the bond to any political party of their choice and the party can then encash it on demand.
• The purchasers are not obliged to disclose to whom they presented the bond, and a political party encashing a bond is compelled to keep the donor’s identity secret.

Anything but transparent

• Electoral bonds are Opaque.
• Transparencyis an essential feature of a democracy.
• In this time, the Supreme Court of India has paid scant attention to the issue. It has allowed the scheme to continue unabated and has denied an interim stay on its operation without so much as conducting a full-fledged hearing.
• But Bonds are not fully anonymous according to the court: Voters interested in finding out the identity of political donors, the Bench said, could simply perform what the order described as “match the following.”
• Parties have no obligation: There is no attendant obligation on political parties to provide details to the public on each donation received by them through electoral bonds.
• Companies are also under no obligationto disclose the name of the party to whom they made the donation.
• Therefore, this “match the following” exercise apart,from being impossible to perform, will also do nothing to pierce the veil concealing the bonds.

Other dubious provisions-

• What is more, a series of restrictions that were in place before the scheme’s introduction have now been done away with. For example,
  • amendments have been made removing a previous prohibition that disallowed a company from donating anything more than 7.5% of its net profits over the course of the preceding three years.
  • Similarly, a mandate that a company had to have been in existence for at least three years beforeit could make donations (a requirement that was aimed at discouraging persons from using shell corporations to funnel money into politics) was also lifted.
  • Thus, through its very architecture, the electoral bond scheme permits unlimited and anonymous corporate funding of political parties.
• In its defence, the Government says two things:

• • Voters have no fundamental right to know how political parties are funded and
  • The scheme helps eliminate the role of black money in funding elections.

• Both these arguments are not tenable:
  • The Supreme Court has consistently held that voters have a right to freely express themselves during an electionand that they are entitled to all pieces of information that give purpose and vigour to this right. Surely, to participate in the electoral process in a meaningful manner and to choose one’s votes carefully, a citizen must know the identity of those backing the candidates.
  • As affidavits filed by the Election Commission of India in the Supreme Courthave demonstrated, the scheme, if anything, augments the potential role of black money in elections — it does so by, among other things, removing existing barriers against shell entities and dying concerns from donating to political parties.
  • Moreover, even if the bonds were meant to eliminate the presence of unaccounted currency, it is difficult to see what nexus the decision to provide complete anonymity of the donor bears to this objective. Indeed, it is for this reason that the RBI reportedly advised the Government against the scheme’s introduction.

Major concerns

• The worries over the electoral bond scheme, however, go beyond its patent unconstitutionality.
• This is because inallowing anonymity it befouls the basis of our democracy and prevents our elections from being truly free and fair.
• A delay in adjudication by the SC, invariably presents a fait accompli.There are, therefore, few issues of greater moral urgency than this that are awaiting the Supreme Court’s consideration. Yet, despite challenges to the scheme having been launched quickly on the heels of its notification in 2018, the Court has failed to hear and decide on the programme’s validity.

Conclusion

Justice P.B. Mukharji of the Calcutta High Court used language that was stronger still. “To induce the Government of the day by contributing money to the political funds of political parties, is to adopt the most sinister principle fraught with grave dangers to commercial as well as public standards of administration,” he wrote. “…The individual citizens although in name equal will be gravely handicapped in their voice because the length of their contribution cannot ever hope to equal the length of the contribution of the big companies.”

The Hindu link

https://www.thehindu.com/opinion/lead/to-the-poll-booth-with-no-donor-knowledge/article38341198.ece

Question- Electoral Bond scheme has made the electoral financing more opaque then before. Describe the controversial provisions of the scheme and methods to improve upon them.