Electoral bonds: To the poll booth, with no donor knowledge

News: Recently, the Union government authorized State bank of India to issue and encash a new tranche of electoral bonds. This again revived the debate of transparency around electoral bonds.

What is the electoral bond scheme and challenges associated with it?

What is the stand of the government on electoral bonds?

According to government, voters have no fundamental right to know how political parties are funded. Also, the scheme helps eliminate the role of black money in funding elections.

What are the challenges with government arguments on electoral bonds?

First, the Supreme Court has held that voters have the right to freely express themselves. So they are entitled to all information, including political parties and funding.

Second, affidavits filed by Election commission of India have demonstrated the potential of black money in elections.

What is the stand of Courts, and what is the impact of court views on electoral bonds?

The court asserted that the bonds were not anonymous. Since both purchases and encashment are made through banking channels, an interested person can look through the financial statements of corporations and match these records with account details filed by parties with election commission of India.

Political parties have no obligation to provide their records. So individuals may not have resources to run through records of all corporations in India. Even if someone can, the matching detail from political parties records cannot be disclosed. So anonymity is written into the system. In fact, government has further relaxed norms on funding.

What further steps have been taken by government and how the courts react?

Amendments have been made to remove the cap on companies which had set a limit of not donating more than 7.5% of its net profits over the preceding three years. The mandate which required a company to be in existence for at least three years before it could make donations was removed.

Judges have warned about potential threats posed by limitless corporate funding of elections. For instance, the Bombay High Court predicted that such funding would overwhelm and even throttle democracy of our country. The Calcutta High Court mentioned that individual citizens will be handicapped, as they can never hope to equal the contributions of big companies.

Thus, it falls upon judiciary to take corrective actions against the lack of transparency built into the system.

Source: This post is based on the article ” To the poll booth, with no donor knowledge” published in The Hindu on 28th January 2022.