April tranche of electoral bonds will further augment BJP’s war chest for ongoing assembly polls

The Supreme Court has declined to stay the issuance of electoral bonds in its current tranche from April 1 to 10. The Association for Democratic Reforms (ADR), an NGO, had made an urgent plea that the issuance of bonds meant for the four state assembly elections be stayed.

The Court noted that the scheme has operated for the past three years without impediments and certain safeguards have been put in. But the whole point is that the scheme itself is an opaque way of funding political parties and it is in-built to favour the ruling party.

The safeguard that the court refers to is its 2019 order in which political parties were asked to give details of the electoral bonds they had received in a sealed envelope to the Election Commission. This concerned the particular tranche issued at that time and no follow-up action was taken.

The basic problem is that the court is not taking up the petitions challenging the electoral bonds scheme pending since 2018. The CPI(M) had also filed a writ petition challenging the bonds.

The electoral bond scheme is a pernicious system of political funding which is not transparent and facilitates corporate funding as a quid pro quo for favours done by the ruling party. Neither the donor has to disclose to whom the money through bonds is being given nor is the recipient party obliged to reveal the source of the donation – a perfect conduit for kickbacks and illegal money to flow. Shell companies can be set up to divert illicit money to a party legally.

According to RTI replies, so far the State Bank of India has issued 14 phases of electoral bonds since February 2018. At the end of this, a total of 12,773 bonds were issued till the end of 2020, of which 12,632 bonds worth Rs 6,472 crores were encashed.

The first tranche was issued in February 2018 worth Rs 222 crores worth of bonds. Of these 94.5 per cent, i.e., over Rs 210 crore went to the BJP. This was clear from the BJP’s audited accounts submitted to the Election Commission.

In all subsequent tranches, the BJP has got over 90 per cent worth of the bonds.

The fact that these donations are from corporates or high net worth individuals is clear from the fact that 92.12 per cent of the bonds issued so far were of denomination of Rs 1 crore or above.

Along with the bonds scheme, the Modi government had introduced amendments to the relevant laws to enable MNCs operating in India to donate funds as Indian companies and not as foreign contributions. Further, the limit of 7.5 per cent of the average profits of three years of a company that could be given as a political donation was also done away.

This has opened the floodgates for money from foreign companies and unlimited amounts from Indian companies to be donated to the ruling party. Given the authoritarian nature of the Modi government, most companies would not risk funding opposition parties.

Though these bonds are anonymous as far as the public are concerned, the government can get to know who is getting the bonds as it is being routed through a government-owned bank.

The April tranche of bonds will contribute to the BJP funds for the assembly elections, particularly West Bengal. So far, after Mumbai, the largest number of bonds were issued in Kolkata which after Mumbai has the biggest concentration of big business.

The government’s claim that the bond scheme is encouraging white money and doing away with black money in elections is also spurious. Obviously, huge amounts of black money sourced from business interests are still a major part of election funding.

The BJP, through these bonds, is only monopolising ‘legal funding’ by corporates and the super-rich, while raising huge amounts of undeclared

money from the same sources. The electoral bond scheme is valuable for the ruling party to formalise the nexus with big business.

The Supreme Court has the responsibility to ensure transparency in political funding and to stop the perversion of democracy through unaccountable and secret sources of money. The sooner it addresses the issue, the better it would be for democracy in India.

(IPA Service)

Views expressed are personal