Electoral bonds: "Opaque funds can influence a nation’s policy"

On 15 February 2024, the Supreme Court struck down the electoral bonds scheme as being ‘unconstitutional’. The petitions that led to this decision were driven by the untiring effort of retired Indian Navy veteran, commodore Lokesh Batra.

Now 77 and living in the US, Batra filed more than 100 RTI (Right to Information) queries over seven years, revealing how—despite opposition from the Election Commission and the Reserve Bank of India—the government of Prime Minister Narendra Modi issued the bonds, the main beneficiary of which was his own party.

How and when did you first decide to focus on electoral bonds and create more transparency on the issue?

The idea of transparency in governance is something I have been working on for many years now. Transparency is what makes the nation strong; it is a tool for participation in governance. I have always believed the government has zero money of its own, they only have the taxpayers’ money. It is every citizen’s responsibility to see how your money is being used.

In 2017, I was watching Arun Jaitley deliver the budget speech. When he started talking about corruption in the political system, my hopes soared. We all knew this existed, so it was heartening to hear him speak about it. But two paras into the speech, he announced the new electoral bonds system, where they would keep the donor’s identity secret. This kind of opacity goes against the spirit of transparency. When I started digging deeper, I uncovered a letter written by the ECI (Election Commission of India) which called it ‘a retrograde step’.

For me, the biggest red flags were when I realised that three acts were amended—the Income Tax Act, the Representation of the People Act, 1951, and the Companies Act, 2013—all to accommodate just one change, the electoral bonds (EBs) system.

I started asking for more details and realised that government departments agreed with the ECI’s concerns. The tipping point for me, though, was when a Union minister (minister of state for finance P. Radhakrishnan) lied in Parliament, denying the existence of such concerns.

What, in your views, were the biggest drawbacks of the electoral bonds?

From day one, various institutions—from the RBI to the ECI—had flagged very serious concerns. There were warnings that the scheme would lead to money laundering, shell companies being created and open up possibilities of quid pro quo between donors and political parties.

I am not an expert, but when institutions voice these criticisms and when the government starts lying, you know there is some shady business going on. If candidates have to submit affidavits of their assets, why shouldn’t parties tell us where they were getting their money from?

What impact does such opaque funding have on our democracy?

For any election to be truly free and fair, there has to be a level playing field between the Opposition and the ruling party. This means that people can donate to whichever party they like, but it should be declared.

[With EBs] you, as a voter, don’t know where the money is coming from; even foreign money can come in. Any opaque money coming in, in large amounts, can influence the country’s policy. The question is, who are the buyers? Such opaque money corrupts those in power and when power gets corrupted, there is no saying where things will end. Most donations were in denominations of a crore.

Anybody donating in crores has to be a super-rich corporate. The question is, why would someone like that donate without a quid pro quo?

The 2019 elections were the most expensive election ever—parties reportedly spent over Rs 60,000 crore on campaigning. If that is the money needed to win elections, how can a common person even dream of becoming a member of parliament (MP) or that of a state legislative assembly?

Your RTI queries highlighted an area that receives scant media coverage—the inner workings of the Modi government. You obtained government files, with candid file notings, remarks and correspondence. What did this correspondence indicate?

From the first letter (26 May 2017) that the ECI wrote, it was clear that there were problems that needed to be ironed out.

Just days before the scheme was announced, the government realised that they had not consulted the RBI on the move. The finance ministry writes to the RBI, which, within a day, responds with a critical opinion (the RBI said amending the RBI act to facilitate EBs would ‘seriously undermine’ a core principle of central banking legislation and ‘set a bad precedent while failing to achieve transparency’).

Instead of taking this seriously, the ministry responds and says the RBI has ‘not understood’ the proposal, and goes ahead with the bonds. What does it tell you, if a secretary-level officer dismisses the concerns of the country’s central bank?

A former secretary recently revealed how the prime minister called the then RBI governor Urijit Patel a ‘snake’; it is almost like saying, if you don’t agree with me, you are a snake.

Former finance minister Arun Jaitley, who introduced the scheme in Parliament, had argued that electoral bonds were a ‘substantial improvement in transparency’ over the then system of donations. Since the judgement, the BJP has defended the scheme. Your comments?

During the hearing, the solicitor general had said the same thing. I concede that the previous system (of electoral funding) was not perfect, it required improvement. But at least anyone who donated above
Rs 20,000 had to reveal their identities. Now you are getting huge sums of money, but the donor’s identity isn’t known at all.

In addition, nowhere does it mention that the money collected through EBs can be used only for elections. Hypothetically, you can build a party office or you can use it to advertise and spend money on the media. You can create an unequal field through unequal spending between parties.

The Modi government argued in the Supreme Court that citizens ‘do not have a general right to know regarding the funding of political parties’. How do you respond to this?

The attorney general (R. Venkatramani) said this on the first day, [to which] I said it is my fundamental right as a citizen to know everything about my candidate, including where their funding comes from. How can you say I don’t have the right?

How do you think the government will respond to this judgement?

Let’s wait and watch. Anything can happen, they can even issue an ordinance. But such a step will give them a bad name, because the entire set of amendments has been called unconstitutional.

What were the challenges you faced? How many RTIs did you file?

I don’t even recollect the number of RTIs, maybe over 100 or so. One major challenge I faced was that government websites have been geo-fenced, which means that sitting in the US, I cannot access government websites like the ECI or even my pension website.

I woke up one day to a WhatsApp message on my phone—it said anyone who wrote against Modi, the BJP or the RSS, would meet the same fate as Gauri Lankesh. I refuse to be fazed by such threats.

Edited excerpts of an interview that first appeared in Article 14