New Delhi: The Union government did not consult the Reserve Bank of India at all and only informed the Election Commission about an amendment to the electoral bond scheme, allowing for an additional period of bond sale ahead of assembly elections in Gujarat and Himachal Pradesh, responses to a Right to Information request shows.
This was in spite of the fact that the original Electoral Bond Scheme was notified by the Union government using powers conferred on it by Section 31 of the Reserve Bank of India Act, 1934.
The Wire had earlier reported how the controversial Electoral Bond Scheme 2018 was amended and notified even as pleas challenging the process to allow anonymous political donations are due to be heard in the Supreme Court on December 6, 2022.
The Ministry of Finance on November 7 issued a notification for amending the scheme to provide “an additional period of 15 days” for the sale of electoral bonds “in the year of general elections to the Legislative Assembly of States and Union Territories with Legislature”.
Normally the bonds are available for purchase by any person for a period of 10 days each in the months of January, April, July and October. The original scheme had provided for an additional period of 30 days, as specified by the government, in the year when Lok Sabha elections are held.,
The amendments provide for an additional 15 days of sale in years when assembly elections to various states and Union Territories are held.
DEA provided documents, file notings running into 32 pages
Following the November 7 notification, an RTI application was filed by activist Commodore Lokesh K. Batra (retired) on November 9, in which he had asked for the subject, name and reference number(s) of file(s) of the Department of Economic Affairs of the Ministry of Finance on which “Electoral Bond Amendment Scheme 2022” was conceived and processed leading, to the issue of the notification.
In its reply, the Central Public Information Officer and Deputy Director (Budget) in the Department of Economic Affairs replied on November 18: “Electoral Bond Amendment Scheme 2022 is dealt in File No. 12(5)-B(W&M)/2021 with File Name “Issuance of Electoral Bonds”.”
In response to another query from Batra through which he had sought copies of the complete set of documents including ‘notings’ in the said file(s) on which the Electoral Bond Amendment Scheme 2022 was conceived and processed and subsequently notified, the DEA stated that the “total number of pages in set of documents, including notings, are 32 and are placed in Annexure 1.”
‘Notification issued citing RBI Act clauses, but central bank left out of deliberations’
These documents and notings revealed that the Reserve Bank of India appeared to have been kept out of consultations while the Election Commission was only informed about the developments.
Reacting to the development, Batra said, “While notification for the Electoral Bonds Scheme were issued quoting clauses of the RBI Act, when it came to making amendments to the notification, surprisingly, the RBI was kept out of the loop as can be seen from the file documents received under RTI.”
The notification for the Electoral Bond Scheme 2018 clearly states that “in exercise of the powers conferred by sub-section (3) of Section 31 of the Reserve Bank of India Act, 1934 (2 of 1934), the Central Government hereby makes the following Scheme…”
Ahead of 2019 LS polls, SC had ordered sale of bonds only till permissible extent
The documents reveal that in 2019 when the Union government had arbitrarily increased the number of days for sale of electoral bonds ahead of the Lok Sabha polls, the Supreme Court had directed that electoral bonds cannot be sold on days beyond the permissible limit.
This case has also been cited in communication between various officials and legal experts who were involved in the amendment process.
The Supreme Court had on April 12, 2019 issued an order which read:
“As per Clause 8 of the Electoral Bond Scheme, 2018, electoral bonds are to be issued for a period of 10 days in the months of January, April, July and October and additional 30 days is provided during an election year. As per the Schedule contained in the Note of the Finance Ministry, dated 28.2.2019, extracted above, a total period of 45 days has been fixed for issuing the bonds in the month of March, April and May. This, we are told, is in addition to the period of 10 days during which the bonds were made available in the month of January 2019.”
As such, it had stated:
“[I]n view of Clause 8 of the Electoral Bond Scheme the days fixed for issuing the bonds in the month of March and May will necessarily have to be related to the period of 30 days allowed for an election year. The total period, therefore, allowable for the month of January (10 days), April (10 days) and 30 days for the election year would be 50 whereas the Schedule contemplates issuance of bonds for a total period of 55 days, 1.e. 45 days plus 10 days of January.”
Noting that some extra days had been allowed for sale of electoral bonds, it directed:
“[A] period of 5 days, therefore, have to be deleted from the Schedule contained in the Note of the Ministry of Finance dated 28.2.2019. Such deletion will be made by the Ministry of Finance who will be free to decide the days of deletion/ exclusion.”
In pursuance of these directions, the Ministry of Finance had issued a modified notification restricting the number of days of issuance from the original May 6-15, 2019, to May 6-10, 2019.
Adviser said clearance from ECI should be obtained
One of the documents provided by the Department to Batra is a note from the Assistant Legal Adviser Arpit Anant Mishra dated March 15, 2021 which states that “the matter under reference pertains to a proposal of the Department of Economic Affairs relating to modification of issuance date from the ones envisaged by Clause-8 of the Electoral Bond Scheme.”
He stated in the note that “the Administrative Ministry has desired that similar to the additional window of 30 days allowed for the elections to the House of People under Clause 8(2) an additional window of fifteen days be also permitted for issuance of Electoral Bond for elections to the State Legislative Assemblies. It is further stated that in view of the matter being sub dice and since, the Model Code of Conduct is in place, such modification can be done following the due course i.e. (a} obtaining legal opinion from this Ministry, and (b) obtaining a clearance from the Election Commission of India.” [Emphasis author’s].
However, as other documents reveal, the EC was only “informed” in the matter and its concurrence was never received.
ECI gave no concurrence in March 2021 or November 2022
During the consultation on the amendment, on November 4, 2022, Secretary Economic Affairs Ajay Seth wrote on the subject of “Amendment to Electoral Bonds (EBs) Scheme, 2018”, that “the Election Commission of India (ECI) was informed about issuance of EBs for a period of 10 days each in November 2022 and December 2022 on 1st November 2022. However, there has been no response from ECI till date.”
With the EC not approving of the scheme, there was some concern in the Ministry. The official suggested that “in view of this, we may inform the Press not to go ahead with the publication of the notification amending the scheme”.
Last year too, on March 17, the letter from the Election Commission to Secretary, Ministry of Finance had only stated that on the issue of “request for seeking concurrence for release of Press Communique in respect of issuance of Electoral Bonds (EBs) in April 2021”, the “Election Commission has no objection, from MCC angle, to the release of (Press Communique)” subject to two conditions.
The EC’s approval to the amendment, if it was ever received, is not recorded.
In a subsequent letter on March 21, 2021 too, the ECI had written to Secretary, Ministry of Finance on the subject of “Ministry of Finance proposal – Request for seeking concurrence for publication of Amendment to Notification in r/o Electoral Bearer Bonds (EBBS) and Release of ‘Press Communique’ in r/o issuance of Electoral Bonds (EBs) in March 2021” that “Election Commission of India has duly noted the contents of Ministry of Finance’s letter” dated March 18, 2021.
Again, it did not provide any concurrence.
‘No prohibition to the government amending the scheme’
Another relevant document which was provided by the DEA pertained to the opinion of Solicitor General of India Tushar Mehra in the matter. Mehta had on March 16, 2021 written that his opinion had been sought on the issue of “whether an amendment allowing for an additional window of 15 days may be undertaken for issuance of Electoral Bond for elections to the State Legislative Assemblies under Clause 8 of the Scheme, similar to the additional window of 30 days allowed for the elections to the House of People”.
Stating that he was briefed on the issue by Secretary in the Ministry of Law and Justice and Additional Secretary Budget in the Ministry of Finance, the Solicitor General said, “The Government of India, through the Ministry of Finance now desires that a similar additional window of 30 days be allowed” and in that context he had been asked to give his opinion on an amendment.
Mehta held that in his opinion, “There is no prohibition to the government amending the scheme allowing an additional window of 15 days for issuance of electoral bonds for election to the State Legislative Assemblies under Clause 8 of the scheme similar to the additional window of 30 days allowed for the elections to the House of People”.
However, he added that “though there is no prohibition as pointed out above, any decision taken by the Central Government in this behalf shall be bound by the interim directions contained in the order dated 12.4.2019” passed by the Supreme Court and shall ultimately be subject to such further orders that may be passed by the apex court, including the final order which may be passed on a group of petitions pending before it and pertaining to the electoral bond scheme.