An Appeal to Supreme Court: Scrap Electoral Bonds

Hon’ble Chief Justice of India,

Elections to the Lok Sabha are due in less than three weeks’ time, a quarterly window is set to open in a few days’ time for donors to pump in money anonymously into political parties and therefore into their election campaigns, and days ahead of that window opening, on March 26, you are taking up another hearing on a petition on Electoral Bonds. As a citizen who loves this great country and our democracy, I urge you to declare Electoral Bonds illegal and void, and to subject the changes made to the laws to enable the scheme to judicial review.

The Electoral Bonds scheme introduced by the Narendra Modi government in 2017-18 goes against the fundamental principle of transparency in political funding. As per the scheme, donors can anonymously donate any amount of money to political parties via Electoral Bonds, a bearer banking instrument sold only by the government-owned State Bank of India. Neither the donor is required to reveal which political party he/she/it donated to, or how much; nor are political parties required to reveal who they are taking money from and how much.

Indeed, the very logic of Electoral Bonds is to receive unlimited amounts of money from corporates and rich individuals and other sources while keeping their identities secret from the people of India, as explained by Finance Minister Arun Jaitley himself in Parliament when he introduced the scheme and the amendments to laws necessary to enable it. Mr Jaitley explained that corporate donors had demanded that they be enabled to make donations anonymously because they fear that if their identities are known, parties that did not benefit from their largesse would target them when they came to power. But surely, the right of political donors to remain anonymous and save themselves from politicians’ vengeance cannot override the right of the people to know who is funding our political parties. When people hear news of defence offset contracts or airport management contracts being given out to certain business houses after suitably changing rules in their favour, they should be able to make the connection between political donations and political favours. Such anonymous donations and political favours have been happening for a long time, they did not start with the Modi government. But all through, such donations and the quid pro quo have been unethical, illegal and subject to investigations and finally to people’s judgement. But the rules governing Electoral Bonds have been written to make what has always been illegal completely legal as per the law itself. This amounts to ‘policy capture’.

Worse, under the Electoral Bonds scheme, the people of India will never know which business interests (domestic and foreign), and which governments and intelligence agencies may be funding our political parties and for what purposes. Clearly, this is dangerous not just to our democracy but to the very independence of our nation.

Secondly, the Electoral Bonds scheme was brought in by hiding amendments to various laws in the Finance Bill. That is, by subterfuge. For that reason alone, Electoral Bonds must be declared illegal and void.

Thirdly, Electoral Bonds create a dangerous imbalance between the ability of the ruling party of the day and the Opposition parties to run their election machinery or even to keep their flock together in the face of allurements that a rich party backed by corporate interests can offer. The fact that corporates asked the finance minister for such anonymity in political funding and then went on to fund the ruling Bharatiya Janata Party (BJP) so massively – in 2017-18, the BJP collected Rs 210 crore out of the total Rs 215 crore reported by political parties to have been donated through Electoral Bonds; and Congress got the other Rs 5 crore – is proof that the scheme has the potential to tilt the balance of democracy dangerously in favour of the ruling party of the day. Today, it may be advantage BJP, tomorrow, it may be advantage Congress. Clearly, corporates do not fund and influence the outcome of elections merely for the love of a certain party, ideology or individual. They do so in order to extract favours from the ruling party, either through violation of extant rules or, through ‘policy capture’, getting the rules themselves written in their favour or getting unfavourable ones deleted. The change of rules on defence offsets in 2016 with retrospective effect and the recent rewriting of criteria for participation in privatisation of airports may well be cases in point that need to be investigated.

Fourth, what happens when a party flush with Electoral Bonds money gets hold of Aadhaar numbers and Jan Dhan account numbers of voters. The party could simply do a ‘direct benefit transfer’ into the voters’ accounts ahead of elections. Thus, the channel from Electoral Bonds through to Aadhaar number and bank account numbers or even just UPI numbers is a potential conveyor belt for unaccounted money from anonymous sources all the way through to anonymous voters. This will in time sound the death-knell of “free and fair” elections.

Fifth, consider the rules that have been written for Electoral Bonds: Any amount of money can be donated, and by any source (domestic or foreign); neither donor nor political party has to ever reveal who donated and how much; companies were earlier allowed to donate a maximum of 7% of their average annual profits for the past three years (meaning also that they should have existed for at least three years and should be making profits), now they can donate any amount of money, including their share capital; so, a company that opened doors only yesterday and has done no business yet can also donate any amount of money without anyone knowing, and the company need not inform even its shareholders. Anybody with the slightest common sense can see that all this has been done so that businesses and political parties can join hands in laundering massive amounts of money.

Electoral Bonds represent in the most concrete way India’s movement towards fascism. The corporates demanded anonymity and the Narendra Modi government granted it and, in turn, the corporates made the ruling party rich. No other democracy in the world has such a scheme that brings businesses and the government of the day so close together as in India through the Electoral Bonds. This cannot be Chowkidari, Your Honour. Please scrap it!