Open Forum
New Delhi,
18 April 2019
Electoral Bonds
TRANSPARENCY VIA
SECRECY
By Dr.S.Saraswathi
(Former Director,
ICSSR, New Delhi)
The Supreme Court has
passed a very important interim order concerning funding of political parties
for election. It has directed all
political parties to provide complete information to the Election Commission in
sealed covers on every single donor and contribution received through electoral
bonds till date. It was hearing a PIL
brought by an NGO challenging the issue of bonds on grounds of lack of
transparency.
The bench headed by
the CJI admitted that these were “weighty issues with tremendous bearing on the
sanctity of the electoral process in the country”. The Court refused to stay the Electoral Bonds scheme, but has introduced some
restrictions.
This scheme, a new
channel for private funding of political parties, was promulgated by the
Government of India under the Reserve Bank of India Act by a notification
issued in January 2018. India is the
first country to issue such a bond in
the nature of a promissory note which is a bearer banking instrument without carrying the name of the buyer or the payee. The buyer need not declare the name of the
beneficiary. Bonds are available in the denominations of one
and ten thousand, one lakh, one million, and ten million.
The buyer can donate
them to political parties which can encash them. Only parties registered under
the Representation of People Act 1951 and have secured at least one per cent of
votes polled in the latest Parliament or State election are eligible to receive
donations under the scheme. Bonds are
valid for 15 days from the date of purchase and are sold at specified time of the
year.
The Attorney General argued that there is no reason to disclose the names of donors and the source of
political funds to the citizens. Parties also cannot produce the details
demanded by the Court as they themselves receive the donations without any
official information about the donors. Except
the CPM, all political parties are in
favour of maintaining secrecy in the matter of political funding. Transparency
in funding is indeed hard to achieve.
The bond scheme was introduced as an experiment with the object of eradicating black money and the government does not want
the court to intervene now and put an end to it. But, the Supreme Court is of the view that if
the identity of the donors buying electoral bonds is not known, government
efforts to check black money would be futile. It looks like an effort of the
government to achieve transparent dealings in party funding in the interest of
eradicating corruption by maintaining secrecy. How this can be achieved through this indigenous Indian experiment is anxiously
watched by the citizens.
The EC is taking a
different stand holding that voters
should know the source of funding of the
parties also. It rejects the argument
that the scheme will help poll reform.
To stop financing of election campaigns using black money, the EC urged
the government to amend laws to ban anonymous contributions of Rs.2,000 and
above made to political parties. When the bond scheme was mooted in 2017, The
EC observed that by removing the cap on donations of 7.5
per cent of the average net profit of the preceding three years, bonds could
open the “possibility of shell companies being set up for the sole purpose of
making donations to political parties”. Anonymity could
help channeling money
through troubled, dying, and bogus companies and thus instead of cleansing party
funds, would add to sources of black money trail.
The “cost of
democracy”, which includes the cost of electoral campaigning and conducting elections, has been increasing like all other goods and
services all over the world. According
to an expert estimation, 2019 general election in India may cost up to $10
billion which is said to be nearly $ 4
billion more than American presidential
election expenditure in 2016. Figures
vary in different estimates, but uniform in suggesting much higher election
expenditure in India compared to the US.
Representative system
of government formed by popular voting is
unable to regulate the flow of money in politics. We believe that there is no
democracy without an electoral system. We also have to believe and admit that a
general election cannot be held without huge expenditure. The inevitable consequence is enormous and
almost unstoppable money power dominating elections which is clearly visible in
the assets declared by candidates and their rapid rise. The ceiling put on
election expenditure of candidates as Rs.28 lakh for Assembly and Rs.70 lakh for
Parliament constituencies in bigger States and much less for smaller States is itself so unrealistic and becomes the
starting point for making money matter opaque in party system and
electioneering.
Issue of coupons
printed by the parties themselves, said to be a way of collecting donations without limit does not seem to be in
practice. In 2016, the EC asked the Law
Ministry to ensure that political parties register details of donors for
coupons of all amounts on the basis of a Supreme Court order issued in 1996. The situation raises a serious
question of transparency in electoral
funding.
In
Britain, the Corrupt and Illegal Practices Prevention Act 1883 is an effort to
regulate financial aspect of political competition. The Honours (Prevention of Abuses) Act 1925 aimed at
ending the practice of selling titles in exchange for donations to political
parties. In 1976, the Committee on Financial Aid to Political Parties recommended two kinds of aid -- lump sum grant to the central party organisation
or reimbursement of election expenditure
to candidates. Excessive spending by candidates is being controlled by
legislations. Checking expenditure seems to be more effective than limiting
donations.
Despite these
regulations, Britain faced “Cash for honours” scandal in 2006 which led to enquiries. Putting a ceiling on individual
donations and on funding political campaigns, and increasing State funding were
then recommended.
The UN
Convention Against Corruption encouraged member-countries to “enhance
transparency in the funding of candidatures for elected public office and when
applicable, the funding of political parties”.
French presidential
candidates are prohibited by law from receiving more than the prescribed limit
of donations to their election
campaigns. Limits are prescribed for individual donations to parties and to presidential candidates. Corporate firms and other legal entities with
the exception of political parties and movements are prohibited from financing candidates.
Contestants have to submit their accounts to the National Commission for
Campaign Accounts and Political Financing. The system seems to be fairly
effective. It put former French President Nicolas Sarkozy in deep
trouble over allegations of illegal funding
of his election campaigns by the late Libyan leader Colonel Gaddafi.
The Australian
Election Commission monitors donations to political parties and publishes
annual list of political donors. Parties
are not required to identify the corporates
which attended fund raising events. Donations above $14,000 have to be disclosed
publicly.
No nation has found
an ideal democratic devise of electoral
funding of parties and contestants.
Inflation is hitting election costs also including the price for votes. Bonds
or no bonds - Unless voters reject money power and understand the significance of
election and democracy, there can be no escape route from money power.---INFA
(Copyright, India News & Feature Alliance)
|