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The Modi govt’s plan to introduce electoral bonds set to face a legal test

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NGO to file a PIL in apex court, says the scheme will only increase the opacity around electoral funding

Kumar Anushuman & Anubhuti Vishnoi

While the Election Commission of India has already made evident to the government its reservations about the electoral bond scheme, the issue is now set to reach court.

The government plans to introduce electoral bonds for political funding. An individual or organisation will be allowed to purchase these bonds digitally or through cheque, which can be redeemed by registered political parties.

ThePrint has learnt that the Association of Democratic Reforms, a civil society organisation that works on political and electoral reform, and lawyer Prashant Bhushan are set to file a PIL in the Supreme Court challenging the electoral bond scheme.

ADR chief Major General (retd) Anil Verma told ThePrint that the PIL was being filed as the scheme would only increase the opacity around electoral funding.

“We will be filing the PIL any day now. Our main argument against the electoral bond scheme is that far from enhancing transparency, as is being claimed, this scheme will only increase opacity in election funding. We are also questioning the finance bill route that the government has taken to bring this about. We think it is detrimental to ensuring a free and fair election,” Verma said.

The Modi government had announced the scheme in the 2017 Union Budget as a major step towards increasing transparency in political funding. While the Centre is yet to reveal the finer details of the scheme, it has already run into rough weather with the Election Commission.

The EC has written recently to the law ministry, asking it to review the move to exempt the electoral bond scheme from Section 29C of the Representation of People Act.

Section 29 C mandates full disclosure of amounts received by a political party and its expenditure incurred. Recent amendments to the RP Act and the Companies Act exempt political parties from revealing details of contributions received by way of electoral bonds.

In a recent meeting called by the finance ministry for a consultation on the scheme, the EC had maintained that the scheme was not favourable towards transparency in electoral funding. Concerns have also been raised about how the information about the donor will be in the sole custody of the banks and thereby liable to be accessed by the ruling government to its own advantage.

In July this year, just as he was demitting office, then chief election commissioner Nasim Zaidi had told ThePrint in an interview that it was imperative that the public know the amount a donor is contributing to a political party and the scheme may be running counter to that principle.

“Some people’s concern may be to give anonymity to big donors but we are here to work for the people. They want to know who has contributed to whom and how much amount — this should be disclosed. So it is a question of trade off — whether the people’s right to know is supreme or not,” Zaidi had said in the interview.

The government, on the other hand, has so far been arguing that unnecessary negativity was being built around the scheme, which is being projected as a first step towards checking black money in politics.

Political opposition will add to the concerns around the scheme. The Congress has strongly argued against it saying it would work against the very objectives with which the government claimed to have announced it. Former CEC S.Y. Quraishi had earlier termed this a “deliberate, mischievous and a dangerous move”.

Anonymity in political funding is widely seen as the breeding ground for black money in the country. Earlier this year, a report released by the ADR on the ‘Sources of Funding of National and Regional Parties of India: FY 2004-05 to 2014-15’ had revealed that over two-thirds of the funds cannot be traced and are from ‘unknown’ sources.

It further pointed out that 69 percent of the total income of the national and regional political parties between FY 2004-05 and 2014-15 is from anonymous sources with BSP topping the list, followed by Samajwadi Party, Akali Dal, the Congress and the BJP. According to the ADR report, the income of national parties from unknown sources increased by 313 percent, while it rose by 652 percent for regional parties in the same period.

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1 COMMENT

  1. So basically –

    No cap on corporate donation to political parties. No transparency. Global funding for political parties. And intimidation and harassment of those who donate to the opposition.

    Electoral Bonds – Mr. Jaitley’s brahmastra.

    1. Removes all caps on corporate donations to political parties. Even loss making corporates can donate now, as a clear quid pro quo.
    2. Removes all transparency of who gives which party how much. No more information on who is Adani donating to.
    3. The Sarkaar will know who donates to the opposition. Intimidation much?
    4. Bonds can be traded like cash, without any tracking, in exchange of cash for a limited period. Matlab 20 crore ke bond khareede koi, kisi aur ko cash (all black) me bech de, aur koi aur use donate kar de. Full anonymity guaranteed.
    5. FCRA amendment already allows foreign companies to fund political parties.

    The Great Indian Democracy Sale?

    Will the judiciary stand up to this as well? Or will the state illogically use the Right to Privacy judgment to defend this?

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