Details of electoral bonds – an instrument originally announced in the Union budget 2017 -- are finally out. The Narendra Modi-government has spelled out the norms on how these bonds will work. A donor can purchase these bonds from specified branches of State Bank of India (SBI) in multiples of Rs 1,000, Rs 1 lakh, Rs 10 lakh or Rs 1 crore and donate it to any registered political party. The party can encash it in its account like a bearer cheque.
This instrument is such that it seeks to promote cashless political donations since these bonds can be purchased either through cash or cheque. But, the big negative of this instrument is the anonymity it promises to the political parties and donors. No one knows which hands are exchanging the money at the end of the day. This anonymity factor in political donations is a problem political observers and analysts have been pointing out for long. Unless finer details of political funding are made available for public scrutiny, room for political-corporate nexus is not ruled out.
Representational image.
A political party can have tacit understanding with a particular corporate to a return a favour (in the form of a policy change or a directive) in exchange of a hefty donation. Last year, a report from Association of Democratic Reforms (ADR), which collates data on funding of political parties, showed various political parties received Rs 7,833 crore of funding from unknown sources between 2004-05 and 2014-15, which constitutes 69 percent of their total income during the period.
An unknown source is income declared in the I-T returns but without revealing source of income for donations below Rs 20,000. In other words, this is the chunk of money that has come from dubious sources and, thus, could very well be a form of black money. The argument -- political donors need no face since rival parties can harass the donor -- do not makes much sense. In fact, it only strengthens the relevance of corporate-political nexus. Besides policy favours across sectors, the presence of this nexus is evident in the massive build-up of bad loans in the public sector banks as well.
Interestingly, political donations are given the gift of anonymity at a time when the common citizen is forced to enter the Aadhaar maze. From mobile phones to bank accounts, the government is imposing Aadhaar on every layer of social life, where the individual is left with not much choice but to comply with the state’s rule and reveal personal identity. But the same rule is not applicable to political parties. Why? This double standard doesn’t augur well in a democracy.
Other bigger irony is that this is a time when government has given a freehand to the taxmen to trace sources of each and every penny deposited in bank accounts post demonetisation. The demonetisation move inflicted considerable pain on the common man, hurt the economy in the form of slowdown in business activities and major job losses in the informal sector.
In an economy, that operates 70-90 percent in cash, demonetisation came as a major jolt. But the government continued to enjoy the support of masses owing to a sense that finally there was some action taken against the rich and the powerful. But, unless it acts to clean up political funding, no amount of work in its fight against black money will be seen as a convincing act. To be sure, the government has acknowledged the opaque nature of the electoral bonds saying there is a scope to improve its structure. This is a welcome sign. The government must work on ways to make every single political donation accountable and traceable to the donor.