Electoral reform or mockery?

Political funding has always attracted apprehensions and criticism regarding the use of black money. Curiosity often piques upon the massive campaigning and the donations that the political parties receive prior to elections, which, in turn, help them amplify their outreach. Monetary aspect definitely strengthens a campaign's impact. The cap on campaign spending has been part of many discourses involving the Election Commission of India (ECI) but the cumulative of those discourses, whatever it was, is bound to be suppressed by the presence of NDA's contentious electoral reform of 2017 – Election Bonds Scheme. By definition, an electoral bond is designed to be a bearer instrument such as a Promissory Note and it will be similar to a banknote that is payable to the bearer on demand and free of interest. Electoral Bonds can be purchased by any citizen of India or a body incorporated in India. The bonds are issued in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore from specified branches of State Bank of India. They can be bought by the donor with a KYC-compliant account. Donors can donate the bonds to their party of choice which can then be cashed in via the party's verified account within 15 days. The amendments to four laws – Reserve Bank of India Act 1934, Representation of Peoples Act (RPA), 1951, Income Tax Act 1961 and Companies Act, 2013 – were done to enable the Electoral Bonds scheme that allows anonymous and unlimited donations to political parties. The scheme exempts the political parties to disclose the donations received by way of electoral bonds to ECI, as part of its annual declaration. It also removes the cap of 7.5 per cent imposed by the Companies Act on the donation by companies to political groups, or donation received from foreign sources. Petitions filed by CPI(M) and Association for Democratic Reforms challenged the scheme citing "an obscure funding system which is unchecked by any authority". Naturally, the petitioners demanded an immediate stay on the scheme besides challenging its validity fearing unfair advantage of a huge monetary pool for the ruling party. The Centre on Wednesday opposed the concerns raised by ECI in the apex court and justified the amendments done in the laws to bring poll reforms "ensuring transparency" and "accountability in political funding". The government was of the opinion that prior to Electoral Bonds, massive donations in cash were made under the old system, pumping in unaccounted black money for financing elections. Through this scheme, an attempt has been made to bring greater transparency besides ensuring KYC compliance and keeping an audit trail. ECI, in its affidavit, had argued that changes made in several laws by the government will have "serious repercussions" on transparency.

While the Supreme Court will hear the pleas challenging the validity of the scheme on April 5, RTI replies display massive sale of electoral bonds ahead of the Lok Sabha elections. In two months (Jan-March), bonds worth Rs 1716 crore have been sold presenting a sharp rise of 62 per cent in electoral bond sale against last year's sale of Rs 1,056.73 crore. Clearly, the implicit purpose of these bonds – unrestricted and unchecked political funding – is been served tremendously while the explicit purpose – transparency – stands mocked. The fact that the names of the donors are not revealed directly undermines public accountability. Moreover, an SBI report revealed that there is no demand for bonds of lower denominations and maximum bonds were purchased in denominations of Rs 10 lakh and above. It invariably points at how the corporate houses are the biggest purchasers of such bonds. It is not difficult to infer who the biggest beneficiary may have been of such bonds – BJP's 2017-2018 audit report cited that it received the largest chunk of funds through electoral bonds. While the amendment to section 29(c) of RPA, 1951, directly impacts electoral transparency, allowing limitless money to be pumped by companies without any information on the donor since the source of such donations need not be declared before ECI, the Centre argues that such bonds are to ensure greater transparency. Transparency, as facts stand, is ensured only of a safe passage to ascertain uncapped funding, which may also be black money, while ECI and the others stand with a long face. Centre's argument rests on how the scheme was a "pioneer step" to bring poll reforms but as matters stand, it is a pioneering step to mock the electoral norms that ensure free and fair elections. The validity of this scheme now rests in the hands of the apex court which must scrutinise the scheme to the point where it unveils its latent intent - if it has not already!