Times of India
Bharti Jain
New Delhi

With Supreme Court scrapping the electoral bond scheme, there are genuine concerns within the Election Commission that unaccounted cash, routed through conduits or registered unrecognised political parties (RUPPs) acting as ‘shell entities’, may make a comeback as the primary mode of political funding in the election year.

Sources in the commission said the demise of bonds could encourage big and small parties to switch back to accepting unexplained cash donations to fund their election campaigns.

Though bonds courted controversy right from the outset over lack of transparency, a senior functionary said they had helped reduce unaccounted cash in political funding by almost 80%.

Of the Rs 11,975 crore funding through poll bonds declared by 18 parties since the sale of the first tranche of poll bonds in 2018, 54% (Rs 6,566 crore) went to BJP, 9.3% to Congress (Rs 1,123 crore) and 9.1% (Rs 1,093 crore) to Trinamool Congress. While national parties (BJP, Congress, CPM and AAP) received a total contribution of Rs 7,847 crore through bonds between 2017-18 and 2022-23, regional parties’ share was Rs 4,128 crore.

Interestingly, electoral bonds were the primary source of income of not only BJP, the governing party at the Centre, but also regional parties governing states, like Trinamool Congress, DMK, BJD and YSRCP. While 54% of BJP’s total receipts between 2017-18 and 2022-23 were through bonds, Trinamool’s inflow from bonds constituted 84% of its total receipts during the same period. Poll bonds contributed 54% of BJP’s total receipts in 2022-23, but this share was way higher for Trinamool at 97%, DMK at 87%, BJD at 84%, YSR Congress at 70% and BRS at 71%.

A law expert said the next best alternative to electoral bonds may be cash payments or contributions through electoral trusts. However, cash donations above Rs 20,000 need to be declared by parties in their annual contribution reports, as mandated by Section 29(c) of the Representation of the People Act, 1951. Even in the case of contributions routed through electoral trusts, both the donor and donee political party are to be named in the contribution reports of electoral trusts and parties.

However, the electoral trust route has its own share of problems. “An electoral trust itself is managed by one corporate group or the other and there exists no defined criteria for disbursal of corporate donations received in the trust to parties. These factors have kept trusts from being a favoured mode of poll funding by corporates,” the expert said.

“Corporates may not find the anonymity of bonds in the current alternatives. Hence, parties may be forced to return to funding through unaccounted cash... precisely the reason why the bonds scheme was introduced,” a former govt official said.

Unaccounted cash remains an area of concern for EC, which has pushed for curbs on its use in elections. In the past 11 assembly elections, the total amount seized rose by 1000% to Rs 3,000 crore, as compared to the last election in these states.

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