Electoral Bonds: What is Electoral Bond
Much hyped Electoral Bond was merely an electronic mode for donating to political parties in India introduced in 2017-18. It was a financial instrument similar to a promissory note redeemable at designated bank accounts of political parties within 15 days of issue.
Electoral Bonds were designed to maintain the secrecy of donors to safeguard them from future biases by political parties. Electoral bonds promoted transparency by ensuring that political parties received donations through Banking channels, thus reducing the influence of black money in politics.
The electoral bonds violated Article 19(1)(A) of the Right to Information Act, which specified that every voter has the right to access information about the funding received by political parties before making their electoral choices.
Five Member Bench of the Supreme Court in its decision specially stated that the “Right to Information” overrides the “Right of privacy”. Henceforth Keeping in mind the right to information of voters, the Supreme Court declared Electoral bonds as unconstitutional. As of 15th March, as ordered by the Supreme Court, the election commission has released the data of all the donors involved in this controversial scheme. Names include Bharti Airtel, Vedanta Ltd, Apollo Tyres, PVR, Sun Pharma, etc. Surprisingly, names of companies such as Adani, and Reliance are missing.
Who are benefited from the Electoral Bond?
The Bharatiya Janata Party has significantly benefited from the Electoral Bond Scheme. It encashed bonds worth Rs 6,060 Crores from 2019-2023. But it’s also important to note that the BJP hasn’t done any malpractices to achieve the same. A person knowing politics understands the fact that a party in power always receives the largest public donations then be it BJP or Congress or AAP, etc. If Congress had launched electoral bonds in their government term; they would’ve also derived the highest benefit. So opposing BJP brought Electoral bonds on the basis that it has benefited them the most is utter nonsense.
Other political parties have also received benefits from Electoral Bonds. TMC received a donation of Rs. 1,397 crore, Congress received Rs.1,334 crore, and BRS got a donation of Rs.1,322 crore. MK Stalin’s party DMK got Rs.509 crore from Santiago Martin’s Future Gaming.
Another legitimate reason for declaring Electoral Bonds unconstitutional by the Supreme Court was its potential use for Money Laundering. These electoral bonds were giving free passage to Shell companies. Earlier there was a limit of 7.5% of profit or 10% of the revenue for companies that were donating funds to Political parties. With the launch of electoral bonds, these limits were removed. As a result, a company operating at a loss could also contribute donations to political parties by categorizing it as an expense, raising significant concerns about the proliferation of corruption and black money cases.
A best current example that comes forward as per data furnished by SBI and EC is of Vedanta Ltd. Vedanta Ltd reported a net loss of Rs 1,783 Crore for the quarter ending Sept 2023. As per data, Vedant Ltd is one of the top contributors of electoral bonds.
This would ultimately impact not just India but also the world economy. This is because any foreign company can seek favoritism just by incorporating a shell company in India and donating to a political
party. As a result, manipulating the financials of a company would become a piece of cake.
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