An invitation to corruption?

The Electoral Bond Scheme inhibits the citizen’s capacity to meaningfully participate in political and public life
Early this year the government introduced an Electoral Bond Scheme purportedly with a view to cleansing the prevailing culture of political sponsorship. But the programme’s failings have been so blindingly obvious, and its consequences so utterly devastating to rectitude and transparency in government, that even O.P. Rawat, who just retired Chief Election Commissioner, thought it fit to deliver a damning indictment of the scheme. “There are many grey areas in this because when there is no ceiling on party expenditure and the EC (Election Commission) cannot monitor it, how can you be sure that what is coming in is not black money as there is a secrecy of the donor,” Mr. Rawat told The Economic Times in an interview last week. “Even foreign money can come and even a dying company can give money now… So, prima facie it appears the scheme cannot really deliver whatever it was intended to.”
Too opaque
In its present form, the scheme permits not only individuals and body corporates, but also “every artificial juridical person,” to purchase bonds, issued by the State Bank of India, in denominations of Rs. 1,000, Rs. 10,000, Rs. lakh, Rs. 10 lakh and Rs. 1 crore, during specified periods of the year. Issued in the form of promissory notes, once a bond is purchased the buyer can donate it to any political party, which can then encash it on demand. The government claims that since these bonds are purchased through banking channels the scheme will eliminate the infusion of black money into electoral funding. But not only is this argument palpably false, as a simple reading of the scheme’s terms shows us, the programme also virtually endorses corruption in political funding, as Milan Vaishnav has argued. Consider, for example, the fact that the scheme allows for complete anonymity of the donor. Neither the purchaser of the bond nor the political party receiving the donation is mandated to disclose the donor’s identity. Therefore, not only will, say, the shareholders of a corporation be unaware of the company’s contributions, but the voters too will have no idea of how, and through whom, a political party has been funded. Just as damaging to the most basic democratic ideals is the elimination of a slew of other barriers that were in place to check the excesses of corporate political sponsoring. For instance, the programme removes an existing condition that had prohibited companies from donating anything more than 7.5% of their average net-profit over the previous three years. This now means that even loss-making entities can make unlimited contributions. Additionally, the requirement that a corporation ought to have been in existence for at least three years before it could make donations — a system that was meant to stop shell concerns from being created with a view purely to syphoning money into politics — has also been removed. The scheme is equally destructive in its subversion of the fundamental rights to equality and freedom of expression. There’s no doubt that the Constitution does not contain an explicitly enforceable right to vote. But implicit in its guarantees of equality and free speech is a right to knowledge and information. Our courts have nearly consistently seen “freedom of voting” as distinct from the right to vote, as a facet of the right to freedom of expression and as an essential condition of political equality. In the absence of complete knowledge about the identities of those funding the various different parties, it’s difficult to conceive how a citizen can meaningfully participate in political and public life. As Ornit Shani’s wonderful book, How India Became Democratic , shows us, the institutionalising of equality through the principle of one person one vote, and through the creation of the universal adult franchise, was critical to building India’s republican structure. When the power of that vote is diluted through opacity in political funding, democracy as a whole loses its intrinsic value. Ultimately, therefore, to borrow from English jurist Stephen Sedley’s formulation, the electoral bonds scheme suggests two possibilities: one, that the government doesn’t understand the Constitution; or, two, it does, and has expressly set out to transgress it.
Suhrith Parthasarathy is an advocate practising at the Madras High Court
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