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13.01.2020
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New Delhi: Soon after then Union finance minister Arun Jaitley announced the government’s plan to launch electoral bonds as a method of making donations to political parties, in February 2017 I had critically analysed its implications.

I had also pointed out that electoral bonds will become the preferred method for making large-sized donations to political parties due to the anonymity that it affords to donors. The electoral bonds receipt data reported by some political parties is now available in the public domain, thanks to the disclosure of their annual audit reports for 2018-19 on the website of the Election Commission of India, has proved my hypothesis.

RTI interventions have also revealed that there were few takers for electoral bonds of lower denominations like Rs 1,000 and Rs 10,000. The electoral bonds receipts data shows the sharp plummet of corporate donations made in a transparent manner as big donors seem to prefer the electoral bonds route.

Also read: Electoral Bonds: SBI Refuses Yet Again to Divulge Information on Rs 1 Crore Donors

My main findings from a quick comparative analysis of the proportion of electoral bonds to total donations received by these parties are given below:

1) According to their audit reports, the total amount of donations that All India Trinamool Congress, Bharatiya Janata Party, Biju Janata Dal, Indian National Congress, Janata Dal (Secular), Telangana Rashtra Samiti and YSR Congress Party received during the financial year 2018-19 from various sources such as corporates, individuals, electoral trusts and electoral bonds is Rs 3,696.62 crores.

Electoral bond receipts amount to almost two-thirds or 65.51% of this total figure.

2) The seven political parties received between 55-87% of donations through the electoral bonds route. No party received less than 50% of its donations through the electoral bonds route in 2018-19.

3) Two state-level recognised political parties received more than 80% of their donations in the form of electoral bonds. At 87.91%, electoral bonds contributed the largest proportion of donations to BJD’s kitty. JD(S) came second with 82.20% of donations received in the form of electoral bonds.

4) TRS came third on this list with electoral bonds contributing more than three-fourths (77.46%) of the quantum of donations received.

5) The three nationally recognised political parties received between 61-69.50% of their donations through the electoral bonds route. While Congress tops this list with 69.49%, the BJP is at third place with electoral bonds contributing only 61.63% of the donations received.

However, at Rs 2,354 crores, the BJP received the largest amount of funding through the electoral bonds route, amongst all seven political parties.

Political funding and electoral bonds. Credit: PTI

The system of electoral bonds introduces a degree of opacity to political funding, which many argue is detrimental. Photo: PTI

6) YSRCP received the least amount of donations through the electoral bonds route. However the figure they received was more than 55% of the total contributions received by that party.

7) Only Congress, TRS and YSRCP declared the amount of donations received from corporates and companies separately in their audit reports. Together they received less than 2% (in fact, 1.45%) donations from corporates in a transparent manner. Corporate donations, when not routed through electoral bonds have to be accounted for in the contribution and audit reports if they are above Rs 20,000.

However, Aristo Pharmaceuticals which made a donation of Rs 13 crores to JD(U) without using electoral bonds is an exception. They do not seem to be fearful of making such a large donation to one political party in a transparent manner. Their certificate of contribution is included in JD(U)’s Annual Contribution Report for 2018-19.

8) At 3.74% corporate donations formed the smallest proportion of total contributions received by the Congress. It was 8.11% for TRS while YSRCP received more than 10% of its total donations from corporates.

9) Electoral trusts and foundations also seem to have lost their charm for political parties receiving funding through the electoral bonds route. Only one national level recognised political party and three state-level parties received funding through this route.

Electoral trusts contributed more than 17% (17.15%) to the Congress’s coffers, making the party the largest recipient in this group. YSRCP received almost 15% (14.91%) of its donations from such trusts while TRS received a little over 9% of funds through this route.

BJD declared it had received less than 1% (0.82%) of its funds from such trusts. Interestingly, the BJP which mooted the electoral bond scheme did not report any receipts from electoral trusts.

In conclusion, the worst fears of advocates of greater transparency in political party funding like me have come true. The opaque electoral bonds mechanism where the identity of donors remains secret has become the preferred route for corporates and individuals making large sized donations to political parties.

Interestingly, not all ruling political parties seem to have received funding through the electoral bonds route. Most notably, Janata Dal (United), Aam Aadmi Party and All India Anna Dravida Munnetra Kazhagam have not reported receipt of any electoral bonds in 2018-19.

Similarly, prominent opposition parties such as Telugu Desam Party, Rashtriya Janata Dal, Dravida Munnetra Kazhagam, Shiromani Akali Dal, Nationalist Congress Party, Communist Party of India, Communist Party of India (Marxist), Samajwadi Party and Bahujan Samaj Party have also not received electoral bonds during the last financial year even though some of them have received donations to the tune of several crores through other modes of payment.

Also read: Electoral Bonds: Here’s What the Numbers Say

Although organisations such as the Association for Democratic Reforms have moved Supreme Court challenging electoral bonds as a mode of making political donations, there is another way to thwart this menace. All opposition parties which have spoken against electoral bonds must publicly make a pledge not to accept contributions from anybody through electoral bonds, and abide by it.

Those that have already received funding through this route, must take a pledge not to accept electoral bonds in future and abide by that pledge. This way, there is a strong likelihood that pressure might be built on the NDA to withdraw this scheme.

The alternate scheme where all donations above Rs 20,000 must be accounted for individually and reported to the Election Commission of India is good enough to serve the purpose of transparency in political party funding, contrary to the NDA government’s thinking.

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