With the recent Supreme Court observation on Electoral Bonds Schemes, the debate on use and misuse of electoral bonds by political parties has once again come to the fore. The Supreme Court observed that the electoral bond scheme of political funding suffers from “serious deficiencies.”

With the recent Supreme Court observation on Electoral Bonds Schemes, the debate on use and misuse of electoral bonds by political parties has once again come to the fore. The Supreme Court observed that the electoral bond scheme of political funding suffers from “serious deficiencies.”

The Supreme Court last Thursday gave the Election Commission of India (EC) two weeks’ time to produce updated data till September 30, 2023 on contributions received by various political parties through the electoral bonds scheme.

According to a study conducted by the Centre for Media Studies, it was estimated that the Lok Sabha election in 2019 cost Rs.55,000 crores. This was the world’s costliest conducted election ever and the share of the ruling party was half of the said amount.

Prof. Jagdeep S. Chhokar, Co-founder of Association for Democratic Reforms (ADR) and former Director In-charge of Indian Institute of Management, Ahmedabad, while sharing his perspective on the recent Supreme Court observations on Electoral Bonds told Radiance, “The Supreme Court asking the Election Commission to provide the data within two weeks is actually not the right thing to do because the Supreme Court has done it earlier also a couple of years ago and I had said at that time also that it is not the correct thing to do because the Election Commission will ask the political parties to give this data as EC has no data of its own.”

Prof Chhokar added, “Now a political party can say that they have received say XYZ amount of rupees worth of Electoral Bonds but they don’t know who has given it to them. They can say that because that is what the Electoral Bonds Scheme says. The basis of this scheme is that the political parties will not know who has given this money to them because it does have the name of the donor and the political parties have to deposit it to the bank account. In practicality, a person who is donating money to a political party will make sure that the political party knows. But if we go by the letter of the scheme then political party should not know. If the political party writes to the Election Commission that we have got 400 crores as Electoral Bonds in this time period but we don’t know who has given it to us,” the party will be well within the law.

“The political party cannot be held liable to declare the names of the donors because as per the scheme the identity of the donor has to be anonymous. So, Election Commission cannot give this information to the Supreme Court. Election Commission will give only what it will get from the political party. If the Supreme Court actually wanted this information, they should have asked the State Bank of India. Asking the Election Commission is a futile exercise. It was mentioned by Justice Gogoi when he was the Chief Justice of India and it was subsequently pointed out in the court but the bench did not pay attention,” he said.

“I have also written earlier that the SC is asking the wrong party to provide the data. The only entity with whom this information is available, according to the scheme, is the State Bank of India. This is an infructuous exercise. If any party gives information, it is well and good but I will be surprised if any party gives that information,” argued Prof Chhokar.

On whether the data will serve any purpose, Prof Chhokar said, “In 2019, when it was first asked, more than 90 political parties responded. We asked the Election Commission through RTI as to how many parties have responded and what are their names and it was provided to us by the Election Commission. We found that some parties who were not even eligible to receive the Electoral Bonds also responded. The fact is that some parties who were not even eligible to receive electoral bonds have responded to the Election Commission letter shows how infructuous this exercise is.”

On the data itself, he said, “Nothing will come out from it and the Supreme Court will have to give its judgment regardless of this information. We have already given the data that is available, and the data that the Supreme Court has asked for will be of no use. It is also available on the Election Commission’s website and the political parties have already mentioned the total amount of money received through electoral bonds in their income and expenditure statements. Election Commission cannot give anything new. The income and expenditure statements of the political parties have been put by the Election Commission on their website.”

According to Dr.S.Y Quraishi, former Chief Election Commissioner, “I have always said that the introduction of Electoral Bonds is a retrograde step as it works against transparency. Earlier any donation over Rs. 20,000 was reported to the Commission. Now crores of donations will not be known to the Commission as to who gave what to whom. The government says that the donors want to keep it secret. But the public wants it transparent.”

“Even the Election Commission itself opposed it in strong terms. It is now before the Supreme Court and I have no doubt the Court will give a very good judgement as they have done in the past. After all, the whole transparency debate started with the Supreme Court when all candidates were asked to declare their criminal and financial background,” Quraishi further said.

Professor Ranjit Singh Ghuman, Former HoD, Department of Economics, Punjabi University, Patiala, said, “The Electoral Bonds lack transparency and accountability and are thus susceptible to illicit financial activity as was pointed out by the RBI when the government first approached it to seek its opinion in January 2017.  However, RBI’s opinion was ignored and the Finance Bill was amended in favour of EBs. Now the Supreme Court also raised similar suspicions. It certainly raises doubts about EBs declared objective of transparency and corruption-free governance. The anonymity of the donor and the political party in EBs is bound to promote crony-capitalism.”

He further said, “The crony companies/corporations multiply their ‘investment’ in EBs and the political parties (read political masters) get the required funds to finance their elections and alleged bribing of the legislatures. The political parties, it is often alleged, ‘use’ those funds flowing from the so-called ‘unknown’ sources to garner political support and votes.”

Prof Ghuman averred, “It is also being alleged that the Election Bond strengthens the ‘bond’ between the beneficiaries and the benefactors (and in this game both the parties are simultaneously benefactors as well as beneficiaries) at the cost of public money which was supposed to come to the Consolidated Fund under Article 266(1) of the Constitution of India and in turn was meant to be used for welfare and development. The law of the land must take cognisance of these and many other hidden motives of the electoral bonds so that the public money could be used for public good in a transparent and accountable manner.”