DNA Edit: SC intervention - It is time to reform the system of electoral bonds

The case against electoral bonds is getting more and more strident. The Election Commission (EC), which has always taken a dim view of electoral bonds, has reinforced it further. It has told the Supreme Court that these bonds are a cause of worry in a democracy because of the anonymity attached to the donors as well as the quantum of cash donated — both of which hamper the Commission’s push towards greater transparency.

Most analysts believe that corruption in India is closely linked to election-time funding. The Supreme Court is hearing a PIL, which demands that if the bonds are to continue, transparency of individual and corporate donors along with the amounts they donate need to be observed in the larger public interest.

The apex court is considering passing interim orders on whether the sale of bonds needs to be stayed. If the court does pass an order, it is going to go down as a victory for those who are campaigning for greater political transparency. There are many things that can be said about electoral bonds, but nothing more damaging that the fact that they legalise anonymity.

The only way to achieve openness is to publish the list of donors. Interestingly, in 2003, the then BJP-led NDA government took the first step towards cleansing the system when government companies and their foreign subsidiaries were kept out of political funding.

Under the rules of the electoral bonds system, the name of the donor is not disclosed. If in the business of electoral funding, no names are disclosed, it is a sure recipe for political corruption. Given the track record of our political parties, when it comes to raising funds, to not permit the names of donors to be made public is bound to raise many questions.

Just how opaque it can become was apparent when a recent RTI reply came up with startling details. In a span of two months — March and April 2019 — with elections looming large, electoral bonds worth Rs 1,176 crore were issued, a whopping 60 per cent jump from the previous year. In 2018, bonds worth Rs 1,056 crore were issued.

In April, 2018, another RTI exposé revealed that the EC had rebutted amendments introduced in four Acts to facilitate the bonds — namely, the Income Tax Act, the RBI Act, the Representation of People Act (RPA) and the Companies Act — saying they suffer from huge problems and are a ‘retrograde step’.

Indications from several other quarters also suggest various anomalies. An SBI report, for instance, has revealed that there is no demand for bonds of lower denominations, as 99.9 per cent of the total bonds were purchased in denominations of Rs 10 lakh and above. This is a clear indication that corporations are purchasing these bonds, not the common man. With so many objections being raised by constitutional bodies and individuals, the apex court has rightly decided to take a hand. It is time to review and reform the electoral bond system itself.