Outgoing Chief Election Commissioner Nasim Zaidi’s demand for transparency in election funding has sparked a debate on what the government defends as a major electoral reform.

The Chief Election Commissioner’s strong remarks against the electoral bond scheme have put the Election Commission of India at odds with the government’s position on what it has touted as election reform and stirred a fresh debate on the issue of political funding.

In an interview to ThePrint over the weekend, CEC Nasim Zaidi said it was imperative that the public know the amount a donor is contributing to a political party.

“What has been indicated in law so far doesn’t indicate much transparency. 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.

The Election Commission has also written to the law ministry asking it to review the exemption for the electoral bond scheme from Section 29 C of the Representation of the People Act. The section mandates full disclosure of amounts received by a political party and the expenditure incurred. Amendments recently moved to the Representation of the People Act and the Companies Act exempt political parties from revealing details of contributions received by way of electoral bonds.

BJP General Secretary and Rajya Sabha MP Bhupendra Yadav differed with the outgoing CEC and said electoral bonds would finally lead to legitimate and clean political funding.

“This is a negative perception. This is a great step. At present political funding is being done in a large way through black money, finally at least a step is being taken to correct this. When a donor will now purchase bonds from the bank, at least the country will know how much is going into political funding. Also, where is the anonymity? The donor will have to declare the amount in his bank statements, will be donating through the banking system via a cheque, so there is no illegality or black money involved at all,” Yadav said.

Sources in the finance ministry closely involved with the deliberations on the scheme said that all of the concerns raised by the CEC had been discussed within the government, but it was felt that a practical balance had to be found between taking a decisive step to curb use of black money in political funding and also allow legitimate use of white money to fund political parties.

Not all, however, agree with the government’s view.

The Congress party has argued that the electoral bond scheme would work against the very objectives with which the government claimed to have announced it.

“By eliminating transparency in as much as the identity of the donor is concerned, the government may be ironically acting against the very objectives of the move as was being touted at the time of announcement,” Abhishek Manu Singhvi, national spokesperson of the Congress, said.

“Such bonds may legitimise anonymous donations of unlimited amounts and thereby directly and grossly violate fundamental principles of transparency. Secondly, it is possible that large chunks of these donations, since they are anonymous, may consist of laundered money. In view of the objectives of transparency and accountability of the required sources of funding, all these may end up being considerably diminished,” he said.

Former Chief Election Commissioner S.Y. Quraishi minced no words while lambasting the government’s move.

“I am against the idea as this will only increase the level of anonymity in political funding in the garb of electoral bonds. The very day the finance minister announced this scheme, the hypocrisy was clear. First, hopes were raised that major steps would be taken to increase transparency in political funding, but finally anonymity is being retained through the electoral bond. This is deliberate, mischievous and a dangerous move. I am glad that the Election Commission has finally shown some courage and taken a clear position on this issue,” Quraishi told ThePrint.

Transparency in political funding has been a key electoral reform the Election Commission of India has been pushing through a range of proposals, most of which have not yet been addressed.

Anonymity in political funding is widely seen as the breeding ground for black money in the country. Earlier this year, a report by the Association of Democratic Reforms (ADR) on the Sources of Funding of National and Regional Parties of India: FY 2004-05 to 2014-15 (11 years) had revealed that over two-thirds of the funds cannot be traced and are from “unknown” sources.

The report also said that 69 per cent of the total income of national and regional political parties between FY 2004-05 and 2014-15 was from anonymous sources with Bahujan Samaj Party topping the list, followed by Samajwadi Party, Akali Dal, the Congress and the BJP.

The income of national parties from unknown sources increased by 313 per cent while it rose by 652 per cent for regional parties in the same period, the report said.

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