Finance minister Arun Jaitley recently announced the draft outline of the Electoral Bonds that the government plans to implement before the 2019 Lok Sabha elections. If implemented without watering, this would be another milestone in the history of Indian polity, which often bears the blame of party politics, casteism, elections favoring vote banks etc.
In the proposed bill, the government plans to create an institutional framework where the government will issue bonds of the denominations Rs 1000, Rs 10000, Rs 1 Lakh, Rs 10 Lakh and Rs 1 Crore through the State Bank of India’s selected branches. The bonds will be made available four times every year, in the months of January, April, July and October. The bonds can be bought if and only if the purchaser has a KYC-compliant bank account. The bonds will not carry the name of the payee and will have a time window of 15 days before expiry. Only registered political parties can accept the electoral bonds and they can only encash the bonds through their registered accounts.
Though the move is aimed at bringing in transparency into the way the political parties funds their activities, there is a lot of ambiguity attached with the way the proposed legislation is presented. The electoral bonds sound a solid move against the black money menace on paper. How far will we able to convert this instrument into a practical reality is still a matter of debate.
One positive thing about the electoral bonds is that it will make it difficult to have large donations coming from illegal sources. As the companies and large donors will now have to reveal the company’s sources of income in front of the authorities to make any such donations, it would be difficult to continue the present practice of converting illegal and black money in the hands of individuals in the form of large political-party donations. This will also make party donations come under the purview of the formal banking system.
From the outside, this legal reform sounds fascinating. One may believe that this will help in reducing prevalent corruption in Indian polity. However, what lies beneath is a potential threat to government machinery. An area where the electoral bonds become problematic is that of the anonymity attached with bonds. In a hypothetical situation, the SBI will know to whom they have issued the bond, and likewise, the bank where the company owns its KYC-compliant account will know to whom the donation is made. Since both these banks come under the jurisdiction of RBI, the central bank can gather data from both the banks and cross verify who contributed for which party.
Though we often consider RBI as an autonomous body, recent history suggests that its autonomy is on the verge of extinction. Many a times, the central government and thus the ruling party may access these records, which in turn may be used against those ‘misguided donors’ who contribute to the opposition. Though the government assured at several instances that the anonymity attached will protect the donors from retaliation, it is highly unlikely that this would be the case. History shows us the instances of how the ruling party may influence the bureaucracy and the larger decision-making process to their favor. The emergency declared under the Indira regime to suppress its political opponents was one such instance where the ruling party diluted the government machinery and imposed its ideology and political interests.
There is an undeniable need for a mechanism to ensure that black money is not pumped into party politics and thus to influence the electoral outcomes. However, it is highly doubtful whether the proposed electoral bonds will serve the purpose. One alternative would be the proposal of the former election commissioner S.Y. Quraishi who planted the idea of a National Election Fund, an idea that suggested that contributors can make contributions to a national fund and it will be redistributed in terms of the share of votes that each party gains in an election. In this way, the menace of black money can be uprooted from the economy, and ruling parties can be kept from misusing the power that they wield.
At the end of the day, the quest should be to churn out policies that bring in transparency, and not those that merely look transparent.
-Contributed by Jiss Palelil
Picture Credits: s1.reutersmedia.net