Opaque political financing could cost democracy dear

Source– The post is based on the article “Opaque political financing could cost democracy dear” published in The Hindu on 18th November 2022.

Syllabus: GS2-Polity

Relevance: Electoral Bonds

News- The article explains the issue related to political financing.

What is the issue all about?

The discourse around political finance in India usually revolves around the issue of corruption.Introduction of electoral bonds is either presented as a pious instrument for ‘cleansing’ politics or as a mechanism for legitimating ‘institutionalised corruption’.

It precludes any focus on the structural relationship between the nature of political funding and the shape of our political system. Corruption is merely one symptom of this structural relationship, rather than being a driving factor.

What is the role of political financing in political competition?

One, the degree of transparency of political funding informs the efficacy of institutional safeguards. For example, the inherent opacity of electoral bonds renders the power of the Election Commission of India (ECI) irrelevant in terms of ensuring a level-playing field  between the ruling and the Opposition parties.

Second, the extent to which political funding is centralised within a party determines whether power in the party is drawn from organisational structures or exercised in a personalistic manner. For example, membership-funded parties such as the Dravida Munnetra Kazhagam and the Bahujan Samaj Party of an earlier era were highly organised parties where leaders wielded power in a responsive, programmatic manner.

Third, the political financing regime also shapes the role of ideas in grounding political competition. But, when political finance is anchored to a narrow concentration of economic capital, the ideological basis of political competition tends to become severely corroded.

What are the  impacts of electoral bonds on political competition?

One, the design of electoral bonds, perhaps more than any other instrument of political finance, leans to the advantage of the ruling party.

The ruling Bharatiya Janata Party (BJP) in 2019-20 got over 75% of the total electoral bonds sold, as opposed to the meagre 9% share of the Congress, according to ECI data.

Second, electoral bonds centralise political funding towards the national units of political parties, further entrenching the leverage of national leadership over the State and local units.

As a reply to a Right To Information (RTI) query revealed, out of the ₹5,851 crore of electoral bonds sold in 2018-19, 80% of the bonds were redeemed in Delhi.

What is the way forward?

The new political financing regime should build on the political pathologies already prevalent in our system that is crumbling organisations, political centralisation, a business-politics compact fuelled by rent seeking and cronyism rather than creating them from scratch.

It is important that independent institutions such as the ECI and the Supreme Court of India step in to layer the seeming black hole of electoral bonds with a minimum level of institutional safeguards.

Otherwise this “reform” of political finance goes down in history as a significant marker in our story of democratic decline.