Electoral bonds: A colonisation from within

This much should be now clear and settled for any reasonable person: the electoral bond scheme was an extortion racket, even if we grant that was not the intention (to be charitable to the designers of this abomination).

The legalised corruption that the scheme unleashed will be studied and analysed for a long time and will go down as a milestone in the history of scandals, one that leaves nothing to the imagination, given the remarkable and well-audited documentation it leaves behind.

The specifics of the transactions, in all their 'horrifying' detail — (a) pharma companies and their donations in the wake of probes into their drug quality; (b) assorted investigations that began and stopped after ‘donations’, one such leading to the proceedings against Arvind Kejriwal; (c) long-pending clearances and other accommodations in favour of business houses that ‘donated’; and (d) a clear stream of foreign funds coming in as donations — have made headlines.

All this points to not only the anti-national character of the scheme but also the open invitation to corruption, laying out a clear path to tamper with the Indian administrative and judicial system.

What can a business leader or a vested interest fail to achieve once the price is known, when legal cover is guaranteed, when secrecy is written into the law and the party of the prime minister of India is the recipient of the bounty?

The electoral bond scheme legitimised corruption by the ‘rate card’ and made rent seeking an efficient, predictable and quantitative enterprise — only, better still, this version was legalised, endorsed at the highest echelons of power. It certainly ensured your ‘job’ would get done, whatever that job might be.

It marks the collapse of India as a modern democratic nation and its firm addition to the list of banana republics, with the outer calm barely concealing the inner dealing room where the dirty jobs are done. This is the inner rottenness of India’s growth story, a colonisation from within till the nation loses its global standing, its reputation, never mind the growing GDP.

What A.R. Antulay had set up in Maharashtra as chief minister can be described as an early version of the electoral bonds scheme, save that his collections were meant for the poor and not for election campaigns. Antulay was forced to resign in 1982 when what was then universally regarded as a monumental scandal about ‘donations’ to trusts he controlled came to light.

It was the BJP that filed the case against Antulay, who collected some Rs 50 crore in trust funds, partly in return for cement allocations to builders in a time of shortages. As the scandal hit the national headlines, the BJP was at the forefront of those crying “corruption”! L.K. Advani led the campaign that highlighted the scandal.

Today, the same party has reached a stage where its leadership talks of a pro-rata justification for collections: we got this much with so many MPs, versus the amount that the Opposition got with fewer MPs, as the attempted justification by Union home minister Amit Shah went.

Yet, the deep damage caused to the nation by electoral bonds is not captured in any of the above. The bigger twist is that India must come to terms with the realisation that its choices of liberalisation and privatisation in 1991 have failed.

India’s liberalisation was meant to free the private sector from the clutches of the ‘licence raj’, fire up our ‘animal spirits’ (to borrow from John Maynard Keynes) and provide the economic escape velocity to enable us to float high above the so-called ‘Hindu rate of growth’.

Prior to such reforms, businesses maintained liaison offices in New Delhi to ease interactions with the bureaucracy and government.

A long time ago, the chief executive of Unilever in India was asked to meet the then prime minister Mrs Indira Gandhi to help put an end to the price control on soap, which had been laid down in a desperate bid to control inflation from the ‘oil shock’ of the 1970s.

None of this would be required after Dr Manmohan Singh, as the Union finance minister under the then prime minister P.V. Narasimha Rao, abolished industrial licencing on 24 July 1991 and declared: “As a whole, the Indian economy will benefit by becoming more competitive, more efficient and modern and will take its rightful place in the world of industrial progress.”

And what did that transition yield? We have GDP growth, but government spending remains a significant part of this growth. The private sector, reticent as ever, still has to (and is equally happy and willing to) negotiate the corridors of power and pay speed money to those who matter. The ones closest to power have grown the most.

Worse, the inefficiencies this builds into the system will not allow the private sector to mature and to stand up to authority, to build the governance systems, to take the bold decisions and the risks that come with those ‘animal spirits’. Why risk it all when there is a side gate to manage the process?

Despite their bent spines, it is the entrenched players who will continue to rule. What we have in the name of a private sector now (barring some exceptions) is money-making at all costs and with the least risk to the money makers. This is not the realisation of that dream of an India firing on all cylinders to solve the burning problems of society.

It is, therefore, no surprise that with liberalisation, we have built wealth and income inequality higher than that obtained during the British Raj, as noted in the World Inequality Lab’s working paper titled Income and Wealth Inequality in India, 1922–2023: The Rise of the Billionaire Raj by Bharti, Chancel, Piketty and Somanchi. It should also be clear that India’s private sector remains a handmaiden to the government—and as such, constrained at the spine. True freedom to innovate and envision has been shackled by worse than red tape.

It may therefore be no stretch to argue that there isn’t a strong and purposeful private sector worth the name in India. It is no surprise that many Indians still don’t trust private enterprises. In India, even today, the working system is to pay a price, buy peace and make money.

The government and those with the means to get close to it stand together in an antipeople agenda.

The writer is a journalist and faculty member at SPJIMR. Views are personal. Courtesy: The Billion Press