What is the whole electoral Bond controversy?
Late Arun Jaitley, then Finance Minister discussed a way to cleanse the political system of black money and bring more transparency to political funding in his 2017 budget by bringing electoral bonds in the system. After two years of the announcement, it has become clear that electoral bonds have made things more non-transparent. Last week, a series of investigations have exposed the questionable method used by the government to push for the scheme.
The electoral bonds are perfectly legal but they are heavily weighted in favour of the ruling party. The State Bank sells the bonds. They are like bearer bonds that don’t carry names. The buyer has to show the source of money paid to buy the bonds. The purchaser then goes directly to the political party office and deposit the money. This way either the party knows or the State Bank of India, who funded whom and how much.
The State Bank can’t give the information to anyone until a law-enforcing agency asks it to. Hence the bond is not anonymous for certain people. However, the citizens have no way of knowing who funded whom and how much.
There could be an argument that the purpose of the electoral bond is not the anonymity, but stopping the unaccounted funds from reaching political parties. Because all the bonds are paid from some bank account so the purpose of accounted-money is served with electoral bonds.
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How a lack of anonymity (for political parties) will affect donors
When a person or company donates funds to a political party then only certain political party knows who funded them. So if a big corporate company doesn’t donate to the ruling party, the party might threaten the big company of consequences when it returns to power. So, the large chunk of money goes to the ruling party, therefore it enhances the chances of the ruling party to win the election.
Although bonds are legal, they seem a little biased as no company would want a government influenced law-agency to bring hindrances for them. Also, It’s not that after the electoral bonds, nobody is funding in cash. The Practice of cash transactions is still relevant. These transactions remain off the records leaving no trail.
Electoral Bonds can’t stop foreign agencies to influence Indian Election by financing them and then look for favors from the new ruling party. Shell companies can be created and donations could be made look-legitimate.
ADR’s findings reveal that 94.5 percent of the bonds worth Rs 210 crore was submitted to the ruling BJP Party in the maiden tranche of the scheme in March 2018. The Bharatiya Janata Party’s audit and income tax reports submitted to Election Commission revealed this surprising data.
Most of the donors are considered to be businesses and corporations who wish to remain on the right side of the government. Since the ruling party knew the benefits of these bonds; it ignored the warnings from Reserve Bank of India (RBI).
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