Electoral bonds speak of a larger collapse

It encourages systemic corruption, widens the wealth divide, and weakens democracy.

It should now be clear to any reasonable person that the scheme of electoral bonds was an extortion racket, even if one grants that (to be charitable to the designers of this ignominy), it was not the intention with which it was devised.

The legalised corruption that the scheme unleashed will be studied and analysed for a long time. It will go down as a milestone in the history of scandals. The remarkable and audited documentation that it leaves behind reveals the specifics of the transactions in all their horror. Particularly concerning are:

Pharma companies and their donations in the wake of investigations into the quality of drugs

Investigations that began and stopped after “donations,” one leading to the proceedings against Arvind Kejriwal

Long-pending clearances and other accommodations in favour of business houses against payments and

A clear path for foreign funds coming in as donations.

These concerns not only point to the anti-national character of the scheme but also stand out as an invitation to corruption — an open-door policy that lays out a clear path to tamper with the Indian system. 

What can a business leader or a vested interest not do when the price is known, legal cover is guaranteed, secrecy is written into the law, and the party of the Prime Minister of India is the recipient of the booty? It legitimises the ‘rate-card’ method of corruption that makes rent-seeking an efficient, predictable, and quantitative enterprise, only that this one is legalised, works at the highest echelons of power, and gets your job done, whatever that job be.

It marks the collapse of India as a modern democratic nation and a firm entry into the territory of a banana republic, with an outer sense of calm barely concealing an inner dealing room where dirty jobs are done. This is the inner rottenness of India’s growth story — a self-imposed colonisation of a nation that has lost its standing, regardless of the growing GDP.

What A R Antulay, as chief minister, set up in Maharashtra can be described as an early version of the electoral bonds scheme, except his collections were meant for the poor and not funds to fight elections. Antulay was forced to resign in 1982 when what was then universally regarded as a monumental scandal about ‘donations’ to trusts he controlled came to light. It was the BJP that filed the case against Antulay, who collected over Rs 50 crore in trust funds, partly in return for cement allocations to builders at a time of shortages.

As the scandal hit the national headlines, the BJP was at the forefront, raising corruption issues. L K Advani led efforts to highlight the scandal. Today, the same party has reached a stage where its leadership justifies collections based on a pro-rata analysis as attempted by Amit Shah: we got this much with so many MPs versus the amount the Opposition got with fewer MPs.

Yet, the deep damage caused to the nation by electoral bonds is not fully captured in the above. The bigger twist is that India must come to terms with the realisation that its directional turn to the era of liberalisation and privatisation in 1991 has failed. 

India’s liberalisation was meant to free the private sector from the licence-control Raj, fire up ‘animal spirits,’ the term given to us by John Maynard Keynes, and provide the economic escape velocity to float high above the so-called Hindu rate of growth.

Before the reforms, businesses kept liaison offices in New Delhi to ease the process of business-government interaction. In one case from a long time ago, a chief executive of Unilever in India was asked to meet then Prime Minister Indira Gandhi to help end the price control on soap, which had been brought in a desperate bid to control inflation in the light of the ‘oil shock’ of the 1970s.

None of this would be required after Manmohan Singh, under Prime Minister P V Narasimha Rao, abolished industrial licencing on July 24, 1991, and declared: “As a whole, the Indian economy will benefit by becoming more competitive, more efficient, and modern and will take its rightful place in the world of industrial progress.”

What has this turn yielded? GDP growth continues, but government spending remains a significant part of it. The private sector, reticent as ever, still has to negotiate the corridors of power and pay speed money to those who matter. The ones closest to power have grown the most. Worse, the inefficiencies this builds into the system will not allow the private sector, on the one hand, to mature and, on the other hand, to stand up to authority, build governance systems, take bold decisions, and take the risks that must come with ‘animal spirits.’

Why risk it all when there is a side gate to manage the process? With a bent spine, entrenched players will continue to rule, and what we have in the private sector (barring some exceptions) is money-making at all costs and with the least risks to the money-makers.

This cannot be the dream of an India firing away on all cylinders to solve the burning problems of society. It is, therefore, no surprise that with liberalisation, we have built wealth and income inequality higher than that obtained during the British Raj, as the World Inequality Lab’s working paper titled ‘Income and Wealth Inequality in India, 1922–2023: The Rise of the Billionaire Raj’ by Bharti, Chancel, Piketty, and Somanchi notes. It should also be clear that India’s private sector has not matured and remains comfortable only as a handmaiden of the government. 

Therefore, it may not be a stretch to argue that there is no strong and purposeful private sector worth its name in India. It is no surprise that many Indians still don’t trust private enterprises. In India, even today, the working system is to pay a price, buy peace, and make money — the government and those with the means stand together in an anti-people agenda.

(The writer is a journalist and faculty member at SPJIMR. Views are personal) (Syndicate: The Billion Press)