Electoral Bond - A Boon or Curse for a Political Democracy ?

In the previous article, we discussed the basic facts related to electoral bonds. This article is about the loopholes in the Electoral Bond Scheme , controversies and the way forward .

A Short Data Analysis of Electoral Bonds :

According to Association for Democratic Reforms, 92% of total Electoral Bonds were purchased by corporates in the period March 2018-January 2021 .Keep in mind that 2019 was a general election (Loksabha)  year.  BJP (Bharatiya Janata Party ) alone got 60.17% of total donation through Electoral Bonds between 2017-18 and 2018-19.. This amount is almost Rs.1660.89 Crore. In the year 2018-19, BJP got Rs.1450 Cr. while Indian National Congress got Rs.383 Cr. In the period of 7 years, 2012-2019, donations from corporations increased by a whopping 974%. The ruling party is the highest beneficiary of this scheme. Now the point is whether all politicians get a level playing field or not. Answer is NO. 

Here is Why Electoral Bonds Do Not Create a Level Playing Field ?

In the Electoral Bonds Scheme, Section 29C of Representation of Peoples Act, 1951 is amended to keep the donor identity secret. The reason given by the government for this secrecy is that the donor may suffer political retribution if his/her identity is disclosed. But while this may be true, this opaqueness of identity gives advantage to the ruling party because the ruling party can request anytime from SBI to reveal the details of donors and can repay them by taking decisions in favor of the donors (largely the donors are big corporate). Opposition parties as well as other common citizens are not able to know the details of the donors unless they themselves  reveal it.  And data suggests that the current ruling party at the centre is at advantage as it has received the highest amount of money from electoral bonds than any other party and the difference between donation amount of ruling party and opposition parties is sky high. 

Violation of IT Act

As per the Section 139 4B of the IT Act, 2000 the political parties are compelled to reveal all details of money they receive as donations or otherwise to the Election Commission of India. But the Electoral Bond scheme violates the act by concealing the name of donors. 

Views of RBI (Reserve Bank of India)  and Election Commission of India on Electoral Bonds

RBI said  that the bonds would "undermine the faith in Indian banknotes and encourage money laundering."

The Election Commission pointed out that “We are not opposed to electoral bonds...but want full disclosure and transparency. We are opposed to anonymity,” 

Voters Right to Know at Stake

The taxpayers money is used to print the bonds as well to pay the commission to SBI for the sale and purchase process of these bonds. As this act does not come under the ambit of RTI Act, 2005 the voter does not know who has funded the political party he/she supports. 

The Election Commission has no list of eligible political parties to receive donations through Electoral Bond. As per ADR report, non eligible parties also got donations through Electoral Bonds.  

Removing Loopholes By Making The Donations More Transparent

The scheme can be amended by taking following aspects into account :

1. In 2017, the central government amended the Companies Act,2013 to allow the companies to donate more than 7.5 percent of their average net profit to any political party. This amendment should be taken back as there is a large probability of corporations seeking favors in return of paying donations. There should be a cap of 7.5% as it was earlier.

2. The government should decide whether the fear of corporate or political retribution is more important or the voters' right to know which is essential in a democracy . So the suggestion is to bring the act under the ambit of RTI Act,2005.

3. To follow the schedule of selling and purchase of bonds strictly. 

4. Every political party and the donor should reveal the donation details on the Election Commission website as per the rules specified by the election commission. A separate may be set up to monitor all the details with regards to Electoral bonds. 

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