Donations to political parties have remained a wellspring of political corruption in India. The fuzzy flow of funds that electrify politicians and political parties has remained the main impediment in eradication of corruption in India. The political masters skillfully manipulate the regulators and architect policies for easy collection of money as political donations from hoarders of black money. Such donors are financially protected by political parties in power by giving them relief by condoning off their bank loans, giving tax sops and relief from paying Income Tax. Many donors falling under Tax payee’s category have misused this methodology of political donations and have evaded tax and laundered money. We have Statutory Provisions for such political donations. Section 29B of the Representation of the People Act (RPA) entitles parties to accept voluntary contributions by any person or company, except a Government Company. Section 29C of the RPA mandates political parties to declare donations that exceed 20,000 rupees. One supports a political party not only to express solidarity or shared beliefs with the party but also for a tax deduction. This contribution is eligible for an 80GGC deduction while computing total income provided a declaration is made by making a report and submitting the same to the EC. Failure to do so on time disentitles a party from tax relief under the Income Tax Act, 1961. There was somehow a transparency to identify the donor and to find out whether the donation was not a part of black money. There would have been a more stringent and transparent system for such political donations but in 2017, the Modi-led government introduced the Anonymous Electoral Bond scheme in The Finance Bill, 2017, during Union Budget 2017-18. The scheme was badly lacking in transparency regarding the source of funds as the donor’s identity was not to be disclosed to the public or the Election Commission, thus making it absolutely difficult to track the origin of these Electoral Bonds and legitimacy of the money. RBI responded by conveying its deep misgivings, arguing that the electoral bond scheme was vulnerable to money laundering, opacity, and potential abuse. ECI too objected to the proposed system of electoral bonds. The ECI argued its objections to the Government on multiple grounds: concerns about foreign influence, the further consolidation of a corrupt business-politics nexus, and legal loopholes that could allow for dodgy money to be routed through shell companies even ECIs concerns were suppressed before Parliamentarian. The Government obsessed with political trickery turned down the RBI’s reservations levelling them as misguided and concern of ECI fell on deaf ears and the Electoral Bond was implemented in 2018. A traverse into the party-wise donation received through Bonds after the implementation of the Bond Scheme gives us a flashy picture: BJP: year 2017-18, 210.00 Cr. year 2018-19, 1450.890 Cr, year 2019-20, 2,555.000, year 2020-21, 22.385 (Corona Period), Year 2021-22, 1,033.70 Cr, Year 2022-23, 1294. 15Cr. Total somewhere Rs. 6566.00 Crore. Congress has received during the same period somewhere to 1124.00Crore (https://www.indiatoday.in). A six-part series of investigative reportage (Electoral Bonds: The great fraud) based on government records into electoral bonds-their origins, design, and operations by Nitin Sethi, a Delhi-based journalist, for Huff Post India, has put out facts confirming some of the worst fears about the electoral bond scheme which the entire political opposition and most transparency activists and experts of electoral processes have expressed since the scheme was first announced in 2017. (https://www.deccanherald.com). The roll out of Electoral Bonds carried with it Amendments in Income Tax Act, Representation of People Act and Companies Act to make the Electoral Bond scheme more murkier.
On February 15, 2024, on petitions, filed by Association for Democratic Reforms (ADR), a five-judge constitution bench of the Supreme Court struck down as unconstitutional the electoral bonds scheme that allowed anonymous donations to political parties and unanimously quashed the high-value scheme, holding that it violates the right to information and thus contravened free speech and expression under Article 19(1)(a) of the constitution and ordering disclosure of the names of the purchasers, value of the bonds and their recipients. The court also revoked amendments made to the Income Tax Act and the Representation of People Act which had made the donations anonymous. It found the amendments to the Companies Act, which removed the condition that companies could only donate up to 7.5% of their profit to political parties without disclosing the details of recipient parties in their profit and loss account, as “manifestly arbitrary”. The court also directed SBI, to stop immediate sale of Bonds and to submit the details of political parties which have received contributions through Electoral Bonds to the ECI by 6 March and ECI to upload the same on its website by 13th March 2024 for public consumption. There were apprehensions that the disclosures directed by the court may actually not happen and ways may be found to prevent them from happening. This will expose the BJP (in power) about its sources of such donations as it always resonates that BJP has obtained donations from those corporate houses whose banks loans in million billions have been waived off by the BJP government. And as expected, SBI has sought time of 30th June 2024 to submit the data so that disclosures could not put the BJP government in a face saving situation for its Donation scam in coming elections of Lok Sabha. Needless to mention here that the Bank Employees Federation of India (BEFI) has alleged that public sector banks and its personnel are being utilized for “narrow political interest of the ruling forces” and said it opposes this. The State Bank of India should adhere to the deadline set by the Supreme Court to disclose to the Election Commission the names of contributors to the electoral bond scheme, a bank employees’ trade union demanded on Wednesday. A contempt petition has also been filed by the Association for Democratic Reforms (ADR) and Common Cause against the State Bank of India (SBI) for alleged non-compliance with the Supreme Court’s order to disclose details of electoral bonds. People are very much optimistic that the Supreme Court will come down heavily on SBI for shielding the political interests of such a party in power that is acting undemocratically and unconstitutionally.