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Electoral Bonds: Anonymous Donor Names will Set the Cat Among the Pigeons

The reveal of hidden electoral bonds donor names is set to shake up politics, especially as reports suggest some were pressured into giving money. This is bound to spark a fresh debate on electoral funding and fairness.

By Sanjay Kapoor
New Update

Electoral Bonds
Photo courtesy: Special arrangement

Before T.N. Seshan took over as the Chief Election Commissioner in 1990, Indian elections used to be skewed in favour of the moneyed and the powerful. At that time, there were too many horror stories of vote stuffing that used to take place in different constituencies of the country. In Western Uttar Pradesh, for instance, the Dalits were told by the dominant Jats to hide in the sugarcane fields till the polling was over, as their votes would be cast. In Amethi or Rae Bareli, both represented by the Gandhi family, there were also many cases of ballot papers being stuffed in boxes. At least once, the officials handling late Rajiv Gandhi’s seat realised that he had got 99 percent of the votes, a fact that would have got his election annulled. Hurriedly, the excess votes were brought down to an acceptable number to save the fate of late Gandhi. From other parts of the country, similar stories routinely appeared where muscular goons controlled the ballot box. On one occasion in Haryana, this writer was physically thrown out of a polling station for questioning bogus voting.

Read More: Electoral Bonds: Beyond the Verdict, the Fight for Free and Fair Elections is Far From Over

Much has changed since Seshan cleaned the Augean stables. By empowering and making the bureaucracy accountable for clean elections, the no-nonsense CEC Seshan put in place a code of conduct that limited election expenditure and prevented bogus voting. In a matter of no time, the Indian elections were seen as not just free and fair, but inclusive polls that were conducted in a professional manner. The only coercive force in Indian democracy was the Election Commission and not any political party or a majoritarian ideology. For a brief while, it seemed that institutional corrections brought in by the ECI had been able to stem the reasons responsible for corruption in Indian society - grey funding of elections that take place all the time. 

These election reforms were possible due to the presence of an independent Chief Election Commissioner in Seshan, who could look the political class in the eye and desire the masses for change. The outcome of these reforms was dramatic. Between 1990 and 1996, the country witnessed the spectre of hundreds of candidates being disqualified for not submitting their expenditure statement. Spending more than the limit was seen as an electoral malpractice. The disqualification of so many candidates put the fear of God in the political class. Fearing disqualification, many candidates spent more time with their Chartered Accountants than campaigning for elections. While the individual candidates' problems continued, political parties have taken advantage of any absence of restrictions on the funding of political parties that have found new ways of raising funds. Over the years, as the elections got more expensive, so did the corruption in society.

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In 1991, this writer broke the Jain Hawala scandal that established the nexus between big money and the political class. The diary was seized before the crucial 1991 parliamentary elections from an employee of a businessman who was distributing money to literally who's who of Indian politics. These include a former President, an ex-PM, and many ministers and bureaucrats. The diary pulled the lid off the fact that nearly all in the government were beneficiaries of kickbacks and commissions from deals. Investigations later revealed that there was a national security angle too in this case as it involved kickbacks from a French company that was trying to set up a power plant in Kashmir. The same company was found to be paying off commissions to militant organisations to perhaps ensure that there was no disruption in their work. Security experts believed that these funds from businesses sustained militancy in Kashmir. What was visible was that the money from the same source funded political parties and state and national elections, as well as Kashmiri secessionism. Did the fungibility of the funds from these kickbacks influence each other? We would not know, but the scandal and its exposure brought about an important realisation that the investigating agencies and the appointment of their chiefs should be done as transparently and freely as possible.

When the issue of corruption once again reared its head during the UPA regime, it led to the rise of a protest movement under the rubric of India Against Corruption. The main demand was setting up a Lokpal or ombudsman to look into corruption in high places. The outcomes of these anti-corruption agitations are well known. Changes were initiated in how the business of governance was to be conducted.

In 2018, the BJP government introduced the concept of electoral bonds to allow corporate funding of polls. This was a device to keep the identity secret of those who purchased electoral bonds from the State Bank of India, though there was clarity about which party was being paid. There was clear recognition that the bulk of the electoral bonds were being purchased in favour of the ruling Bharatiya Janata Party. Others were suffering in comparison. The Congress, which had ruled for more than 50 years, was only getting a small percentage of what the BJP was getting.

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The Association for Democratic Reforms (ADR) has reported that from March 2018 to January 2024, electoral bonds generated a total of Rs 16,518.11 crore in funds for political parties. The BJP secured nearly 55% of these funds until March 2023, significantly outpacing the Congress Party, which received only 9.3%. The period with the highest sales of bonds across all 30 phases occurred in the lead-up to the last Lok Sabha elections in 2019, with bonds worth ₹2,256.37 crore sold in the short span between April 1 and 20.

Last week, the Supreme Court of India, perhaps six years too late, responded to a PIL claiming that the electoral bonds were bad in law and violated the principle of transparency and hurt democracy, and hence should be scrapped. The SC, after a long hearing, surprised its legion of detractors and struck down electoral bonds and also demanded that the SBI should reveal the identity of those who purchased the bonds. This was a dramatic judgement that promises to change the way funds are raised for elections. There are many who believe that the government would not relent and would enact legislation to restore electoral funds, but it seems unlikely, going by the accolades the SC and the Chief Justice-led bench have got ever since the judgement was delivered. More than that, details of those who purchased the electoral bonds have begun to leak before their names were made public. What is clear is that most of those who purchased these high-value bonds were arm-twisted through raids by enforcement agencies. This kind of arm-twisting to make businesses cough up cash to the ruling party is a crime. In some languages, it’s called extortion. When the full details of those who bought the electoral bonds are revealed, then it will become clear what went into the purchase of these bonds and also did it buy these companies immunity from law or not. Expect interesting times.