April 26, 2024

For a government that swears by honesty, electoral bonds are a huge blot on NDA’s policy-making process. Any instrument that allows donors to hide behind anonymity is obviously a tool for hidden transactions. The very fact that the receiving party knows the identity of the donor opens doors for future quid pro quo. It matters little that the bonds are to be purchased only through bank accounts. That only provides that the money is donated from tax accounted for funds and not in black money. But with tax exemptions available under section 80GGB of the Income Tax Act, no one in his or her sane mind will want to donate in black money. The worst part is that political parties are not required to submit the name of donors who contributed through electoral bonds in their report to Election Commission. This means that the public is never going to know which individual or company donated to which political party. It also means that if large government contracts and tenders are given or any other kind of favouritism is bestowed on such individuals or companies, it will be impossible to prove quid pro quo. It will open the flood gates for corruption in high places, the very thing the NDA government says it is trying to obliterate.

Also, the rule that the electoral bonds must be purchased through banking channels is not a guarantee that only tax accounted funds will be used to make the donations. Some companies have a maze of subsidiaries and shell companies that have been so designed to show a huge amount of cash in hand or carry forward losses from previous years. It is very easy for the promoters to pump in their black money for the cash in hand or generate book cash by showing profits in the current year to adjust past losses. This money can then be used to buy electoral bonds and fund political parties. Politicians are also known to approach favoured businessmen to adopt this route for the huge funds received in cash by the party, with a promise to ‘make amends’ once they come to power. It is obvious that in this scheme of things, it is the ruling party or the party that is favoured to come to power by opinion polls that is going to benefit. Since the BJP is currently the hot favourite, it is reaping rich dividends from electoral bonds.

The Election Commission has informed the Supreme Court that it had told the government that the introduction of the bonds and subsequent changes in many laws to facilitate that would be a huge setback for transparency in electoral funding. If at all the electoral bond route is to be allowed, first of all, they should not be sold as a bearer instrument. Whoever purchases such bonds must specify the name of the party for which he or she is buying, which should also be specified on the bonds, making them account payee instruments. Political parties must issue separate and numbered receipts for donations through these bonds. Then, companies and individuals must report the same with the name of the political party in their tax return along with the receipt number. Finally, all political parties must disclose the name and address of donors who paid through electoral bonds in their report to the Election Commission. That would make the system transparent and above board. But one has little hope that it will be done. For, the bonds were designed to be an opaque method of funding through which black money could be routed to political parties leaving no proof of quid pro quo. The Supreme Court must disallow them.