The Supreme Court, after reserving its order on Thursday on a PIL challenging the ruling government’s electoral bond scheme for political funding, directed all political parties to furnish receipts of such bonds and details of identity of donors in a sealed cover to the Election Commission just today. Details of amount and bank account of donors are also to be provided my May 30th.
This order, pronounced by a bench comprising Chief Justice Ranjan Gogoi and Justices Deepak Gupta and Sanjiv Khanna would have come as a rude awakening to the incumbent BJP party who benefitted the most from its well thought out scheme to aid its election funding, and would have come as a relief to the Association of Democratic Reforms, an NGO, which challenged the validity of the scheme and sought that either the issuance of electoral bonds be stayed or the names of donors be made public to ensure transparency in the poll process.
Launched in January 2018, an electoral bond is a monetary instrument that allows citizens, corporate groups and foreign companies to donate money completely anonymously to a political party, without having to report the source of such funding, as long as they purchase the bond from SBI. The reason given for introduction of such bonds is to curb the use of black money for election funding.
How it works is like this, you walk in to an authorised SBI branch and purchase the bonds, which come in specified denominations ranging from 1,000 ₹ up to 1,00,00,000 ₹. You provide your KYC details to SBI, and afterward, the bonds are delivered to the chosen political party, which can exchange them for cash. They don’t carry the name of the donor and are even exempt from tax.
The logic for keeping the name of the donors anonymous is to protect them from politics over their donation. Example, if you donate an amount of 50,00,000 ₹ to BJP, other political parties do not know your identity, and cannot question you or come after you.
SBI, however, knows the identity of the buyers (as they sell the bonds and are in possession of the donor’s KYC details), and hence, it was felt that the government in power can easily find out who bought the bonds and if it was donated to its party or not.
Let us also remember that the limit for cash donations to political parties is 2,000 ₹ only and anything beyond this limit must be done through banking channels, where, the details of the donor would be available to all and sundry.
Therefore, another justification in support of electoral bonds is that one can donate as much as one desires and maintain anonymity, and further, by making SBI act as an intermediary, the money is rooted via a banking channel and is there is a trail of it.
What is interesting to note is that the Election Commission has opposed this scheme even before it was launched and continues to be a critic of it; and with good reason. The 2 primary issues flagged by the watchdog were anonymity of the donor and enabling even non-profit companies to make donations (which by the way is against the Companies Act as well) this paves the way for shell companies to be set up for the sole purpose of making donations to political parties; and what’s worse is that the source of these funds could be illegal, thereby defeating the very purpose for which the scheme was ushered in.
If one does a bit of number crunching, it’s not hard to see why the bonds are so popular with the BJP party. Out of a total of 221 crore ₹ of donation made through electoral bonds in 2017-18; BJP was the beneficiary of 210 crore ₹, that translates into 95% for the ruling party. Other parties put together received just 11 crore ₹. The Congress was the recipient of 5 crores through the bonds in the same period.
The Congress, in its manifesto has promised to scrap the scheme if it comes to power.
The Centre’s lawyer, Attorney General KK Venugopal, defending the scheme in Supreme Court said “voters have the right to know about their candidates……. why should they know where the money of political parties is coming from”.
Mr Venugopal, if we gave a similar reply to an agency like the Income Tax Department saying, you know our income, but why are you concerned where it came from and what is the source, we would surely be prosecuted. So, the question to be asked is that, when we as individuals are accountable to provide the government with details of what we earn, where it comes from and are even subject to audit; then why should Political parties not be liable for the same level of accountability?
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