Can the I.N.D.I.A. bloc convince voters that electoral bonds were a scam?

Pro-government YouTubers, influencers and trollers have been hyper active these past few weeks in denying that the electoral bond was indeed a scam. The Supreme Court, while declaring it unconstitutional, did not use the word ‘scam’ in its judgment, they have argued. Moreover, the fact that several opposition parties too received donations in the form of electoral bonds would make the opposition too a beneficiary of the scam, they have pointed out. Hence, the electoral bond scheme was not an extortion racket and scam and therefore a non-issue in this election.

With much of mainstream media indifferent to the controversy and some sensational investigation done by independent journalists, portals like Reporters’ Collective and Newslaundry besides The Hindu among others, the challenge before the opposition is to drive the message home. There is a buzz around the issue but most people are still confused and are not certain that it was indeed a scandal.

A key argument offered by the government and its apologists has been that the electoral bonds were bought and redeemed through banking channels and hence the transactions were all clean. Their naïve belief that there can be no fraud in digital and banking channels was misplaced but has many takers. So, what can the opposition do to put the BJP, the main mover of the scheme and its main beneficiary, on the backfoot?

BJP candidates can be asked to explain why the scheme allowed foreign companies to make anonymous political donations, overturning the ban on such donations since independence. They can also be asked to defend the decision that allowed companies to make unlimited donations to political parties by removing the ceiling of 7.5 per cent of the average profit over the previous three years.

When the 7.5 per cent cap, was removed in 2017, the Election Commission of India had warned that this could lead to the use of “black money through shell companies”. The RBI had also flagged the possibility of firms misusing bearer bonds for money laundering. The ED (Enforcement Directorate) set up specifically to investigate money laundering did little or nothing to investigate such donations or money-laundering.

Investigation of the data released grudgingly by the State Bank of India and uploaded by the Election Commission of India have also revealed that several companies being investigated by central agencies also bought electoral bonds worth hundreds of crores. Can it be described as incompetence of the central agencies or corruption in which the state was complicit?

What the partial and incomplete assessment of data by The Hindu have revealed are the following:

1. At least 33 companies, which had negative or near-zero profit over seven years between 2017 and 2023, had donated bonds worth Rs 576 crore, 75 per cent of it to the BJP. 16 out of these 33 companies paid zero or negative direct taxes.

2. Despite companies in existence for less than three years not allowed to make political contributions under the law, at least 20 newly incorporated firms purchased poll bonds worth about over Rs 100 crore. Five of them were in existence for less than a year and seven were a year old.

3. Profit-making firms purchased bonds for donations exceeding their aggregate profits; what kind of a company would donate more than their profit?

A lot more dirt about the scheme has surfaced in the public domain and the political parties need to somehow take these questions to the voters for this to become an election issue.