Electoral Bonds – Joining the dots

The controversy surrounding the Electoral Bonds, the conduct of SBI and the Election commission of India since past 2 months has been at its peak. Therefore, it is important to evaluate the various aspects fanning the controversy.

The Judiciary was already dealing with 2 major matters attacking the Constitutional validity of the electoral Bonds and the main ground for challenge was that the Electoral Bonds lack transparency.

Although the electoral bond system was aiming to drive the entire political landscape away from black money and cash donations, apparently, voters right to information about such donations through electoral bonds was being compromised.

The Ugly Past of Indian Political Funding:

It was not very long-ago, the newspapers and TV channels often carried coverage about huge amounts of illicit cash being intercepted and apprehended. Since independence, the Political parties used to forcefully or by threats, or by arm twisting methods demand donations from the corporates and private entities. Some of such demands were nothing less than ‘extortion’ or ‘bribe’.

Private entities and corporates used to give in to the demands due to the fear and favour both in their minds. Labor unions, government policies, statutory compliance monitoring agencies, law enforcement departments were also used at earlier times to exhort pressure.

Even today the subject of such black and cash money is alive but thanks to demonetization, the amount of cash circulated in political funding has reduced considerably.

The tremendous need for Political funding in India.

India is a nation which is constantly in election mode. Although it was envisaged by the framers of the Constitution of India that the Parliamentary and State elections shall happen simultaneously, the premature dissolution of both the Parliament and State Governments on several occasions has forced our nation to face elections in some or the other state or multiple states every year.

Therefore, Political parties are continuously required to spend on election campaigning, image building, and various other activities.

If the concept of One Nation One election is implemented, no doubt the need for Political funding shall come down significantly. It is easier said than done, as more than one constitutional amendment may be required. One should not be surprised with the new government coming in place by June 2024, the step towards one nation one election shall be taken.

Nexus with a larger plan and demonetization.

The objective of eliminating black money and cash from funding of Political Parties was at the core of the Electoral Bond system. This objective was in sync with the demonetization plan implemented by the Union Government in 2016. It is evident that the Union Government meticulously worked upon an undisclosed larger plan to attack the black money and cash transactions on various fronts at the same time since 2016.

Even micro transactions at grassroot level were channelised through digital payment gateways such as UPI Payments, thus eliminating cash transactions from the common man’s daily lives.

Thus, with the same vision, the Electoral bonds were launched. The Political funding was routed through electoral Bonds which were subscribed by private entities including corporates. The Bonds were made available through the premier nationalised bank SBI. Hence the big question arises, whether the entities who challenged the constitutional validity of the Electoral Bonds at the Supreme Court could have contributed towards betterment of India and its political system by advising on how to improve the Electoral Bonds system? If yes, then why was it chosen to merely attack the entire system of Electoral Bonds?

Just like any other system when newly launched, faces some teething problems or glitches, the system of Electoral bonds also apparently had some flaws in terms of transparency and right to information. This aspect could have been worked upon and improved.

The Global Scenario:

None of the developed countries encourage cash and black money in Political landscape and always promote electoral funding through legalised mechanisms.

USA, UK, other European Countries already have an established system of crowd and public funding of Political parties through banking systems.

Countries like Brazil, or other peers of India where black money and cash is still prevalent, face many episodes of political scandals involving huge amounts of money. Basically, this reflects on the performance of their national economy and global image.

The donors right to Privacy:

The donor and donee’s rights are to be well defined and piercing anybody’s privacy based on right to information is to be allowed only to the extent where the right to privacy of other stake holders is not violated, except lawfully.

If the information about who has donated to which political party is disclosed, then such donor entities may face negative repercussions from other political parties. Right to information of voters is equally important as compared to right to privacy of the donors.

Anonymous donations have always been a part of our culture and tradition for ages. There is a view that political funding through electoral bonds may influence the potential new government and seek favours in the form of policy, contracts, etc. However, there is also a counter view which is equally strong that the Political party which is having a nationalistic and welfare

based political agenda, which has a good performance record and potential, shall garner larger political funding, thereby leading to funding of people’s wishes.

If not Electoral Bonds, then what?

The lay people in India are not aware about the complex subject of electoral bonds, its benefits, the law involved, and why the Supreme Court has opined against the system of electoral bonds.

The electoral bonds system could have developed into a well-oiled and constitutionally valid system over a period.

One thus thinks, whether the opposition to Electoral Bonds was an opposition based on its flaws, or the opposition was similar to the opposition faced by Aadhar Card, UPI payments, Bullet train, National Highway projects, the Farm laws, Uniform Civil Code, Citizenship Amendment Act, etc.?

The author, Satya Muley, is a practicing lawyer in Bombay High Court and the Supreme Court based out of Pune.

(Disclaimer: The views expressed above are the author's own and do not reflect those of DNA.)