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New Delhi: On December 30, 2021, the Union finance ministry announced that the 19th phase of the sale of electoral bonds will begin from January 1 and go on till January 10.
Politicians and rights activists have once again raised the grave concerns associated with anonymous funding through these bonds.
They have also questioned why the Supreme Court has so far not taken up the petitions which challenged the constitutional validity of this scheme.
The finance ministry’s statement said the sale of electoral bonds will take place at 29 authorised branches of State Bank of India. The bank has been authorised to issue and en-cash these bonds.
The ministry said the Union government notified the electoral bond scheme in 2018 and as per its provisions electoral bonds may be purchased by a person who is a citizen of India or incorporated or established in India. As per the scheme, political parties registered under Section 29A of the Representation of the People Act, 1951 and which have secured not less than 1% of the votes polled in the last general election to the Lok Sabha or a state assembly are eligible to receive electoral bonds and then get them en-cashed through a bank account.
The scheme has been criticised for promoting opacity in donations.
Many petitions against scheme pending in SC
In 2017, the Election Commission had also raised serious concerns about the scheme.
A number of petitions have also been filed in the Supreme Court since 2018. The apex court has twice refused an interim stay on the scheme – the latest on March 26, 2021, when a bench led by then Chief Justice S.A. Bobde heard a petition filed by the NGO, Association for Democratic Reforms (ADR).
Opposition parties have also repeatedly held that the electoral bond scheme allows large anonymous donations to political parties, and this undermines the essence of democracy.
In July this year, the Communist Party of India (Marxist) moved the apex court seeking urgent hearing of a batch of petitions that had challenged the constitutional validity of the electoral bonds scheme. In its petition, the Left party had stated that the matter pertained to “the right to know and have information of who, rather which entities/corporations are funding our political parties, potential quid pro quos, corruption, etc.”
“It is important for a functioning democracy to have a transparent system of political funding. Since the adoption of the Electoral Bonds Scheme in 2018…there has been a massive amount anonymous donations which challenges the very core of our democratic functioning,” the CPI(M) petition said.
Businesses allowed to make anonymous donations through scheme
The scheme has also been criticised for the manner in which it was structured. It is said that the removal of a limit on corporate donations that existed earlier, and allowed donation of only 7.5% of three-year average net profit, has since allowed businesses to make anonymous political donations.
On December 30 evening, CPI(M) general secretary Sitaram Yechury tweeted about how the matter pertaining to the scheme is still pending before the apex court even as the sale of electoral bonds is about to begin. He insisted that while the petitions remain unheard for more than three years, this has permitted BJP to display obscene money power.
19th tranche of Electoral Bonds comes, predictably, before another crucial assembly elections.
Petitions challenging this legalisation of political corruption remain unheard by the SC for more than 3 years.
This permits BJPs display of obscene money power.https://t.co/y581jyaISq
— Sitaram Yechury (@SitaramYechury) December 30, 2021
Nearly three-fourths of all electoral bond money
The opposition’s criticism of the scheme as one structured to support the ruling party is not without reason. BJP has emerged as the biggest beneficiary of the scheme. As reported by The Wire in August this year, the saffron party received about three-fourths, or 76%, of the electoral bonds sold in the financial year 2019-20.
Citing data from the Election Commission, NDTV had come out with a report as per which Congress was a distant second getting just 9% of the total bonds sold during the fiscal year. In all, electoral bonds had netted Rs 3,355 crore in in 2019-20.
Of this amount, BJP received Rs 2,555 crore in 2019-20, a 75% increase from the Rs 1,450 crore it received in the previous year. Congress received Rs 318 crore in 2019-20, a 17% decline from the previous year when it had received Rs 383 crore from electoral bonds.
‘Majority of funding from unknown sources’
Another report by ADR in August this year had stated that over 70% of the income of the political parties was coming through unknown sources, including electoral bonds. It said the political parties garnered Rs 3,377.41 crore from such sources in 2019-20, which amounted to 70.98% of their total income.
The report also pointed out that out of the income of Rs 3,377.41 crore that came from such unknown sources, the income from electoral bonds was Rs 2,993.82 crore or 88.64%.
It added that while the parties need money for their expenses, an analysis of their income tax returns and donation statements filed with the Election Commission revealed that most of the sources of such income were never revealed.
The report also said that such anonymous donations become possible since the political parties do not have to reveal names of individuals or organisations giving less than Rs 20,000 and neither do they have to disclose the names of those donating through electoral bonds.
Nearly 15,000 crore collected by political parties from unknown sources in last 15 years
Stating that over 70% of the funds remained anonymous, the ADR report also revealed that between 2004-05 and 2019-20, the political parties had collected Rs 14,651.53 crore from such unknown sources. “During the financial year 2019-20, the BJP declared Rs 2,642.63 crore as income from unknown sources which is 78.24 per cent of the total income of national parties from unknown sources (Rs 3,377.41 crore),” the report added.
As for the Congress, it said, the party had declared Rs 526 crore as income from unknown sources, which amounted to 15.57% of the total income of the national parties from unknown sources.
Stating that the unknown income was generated through various means such as ‘donations through Electoral Bonds’, ‘sale of coupons’, ‘relief fund’, ‘miscellaneous income’, ‘voluntary contributions’, and ‘contribution from meetings/morchas’, the ADR had recommended that a body approved by the Comptroller and Auditor General of India and the Election Commission of India should conduct the scrutiny of financial documents submitted by the political parties.
‘Only big companies eyeing bigger returns would buy electoral bonds of Rs 1 crore’
Earlier, transparency rights and RTI activist Commodore Lokesh Batra (retired) had also raised the issue of a majority of the electoral bonds sold having been of the highest – Rs 1 crore – denomination. He had told The Wire that an analysis of the data had revealed that over 92% of the electoral bonds sold were off the Rs 1 crore denomination, which was the highest denomination allowed for them.
“Think of who can buy electoral bonds of Rs 1 crore denomination. It is not ordinary citizens like you or me but only big companies who have eyes on bigger returns. And that is where corruption begins,” he remarked.
Batra had insisted that “transparency is the foundation of a democracy that requires a ‘free and fair’ electoral process. For that people have the ‘right to know’ the candidates and the political party well. Also, this demands that there should be transparent political funding since anonymous donations through electoral bonds creates an uneven political playing field.”