Where parties stand on electoral bonds scheme: Ushering in ‘clean elections’ to criticism of ‘opacity’

Since the introduction of the scheme in 2018, the BJP has pitched it as a transparent solution to a corrupt electoral process.

When presenting the Union Budget for the 2017-’18 fiscal year, then Finance Minister Arun Jaitley proposed the scheme “in an effort to cleanse the system of funding of political parties”. Jaitley argued the scheme would bring about greater “transparency and accountability in political funding while preventing future generation of black money”.

According to the scheme, a person can donate a maximum of Rs 2,000 in cash to a political party. However, political parties were entitled to receive donations by cheque or in digital mode from their donors who could purchase bonds from authorised banks. They would be redeemable only in the designated account of a registered political party and within the prescribed time limit from the date of issuance, Jaitley said. Another provision is that every political party would have to file its return in accordance with the provisions of the Income-tax Act, 1961.

Amit Shah, the BJP president at the time, said electoral bonds underlined the government’s commitment to electoral reforms and curbing corruption. He said the scheme would usher in an “era of clean politics”.

Congress: ‘Perpetuates opacity’

The Congress has protested against the scheme since its introduction, arguing that electoral bonds were an exercise in “perpetuating opacity and electoral malpractice”, ensuring that all funds go to the ruling party.

The Congress dismissed the government’s narrative of this scheme being a measure of “electoral reform”, objecting to the anonymity of donors.

Senior Congress leader Manish Tewari argued it was easy for the government to obtain data from the State Bank of India — the bank authorised to sell the bonds — and find out which organisation purchased an electoral bond and which political party had encashed it.

Tewari said the Centre had made “government corruption official” and previous regulations on the influence of the rich on politics were no longer present. “Despite reservations expressed by the RBI and Election Commission, the government went ahead with the introduction of electoral bonds,” he said.

In November 2019, Congress raked up the issue in Parliament, demanding that Prime Minister Narendra Modi break his silence on the issue. Calling it a “big scam”, the Opposition party demanded a joint parliamentary committee inquiry into the “opaque” donations.

Following this, Union Minister Piyush Goyal said electoral bonds were a decisive factor in promoting transparent electoral funding. Saying that electoral bonds brought “accountability to the system”, Goyal quoted scams under the Congress regime — Bofors, 2G, Coalgate, among others — and said it was natural for a party to oppose a system “cleaning” elections “from the curse of black money”.

Goyal said there had been multiple rounds of consultation between the RBI and the government between the passing of the Finance Bill on March 31, 2017, and the notification of the scheme on January 2, 2018.

Four days after Congress raised the issue in Parliament, Modi said at a Republic TV summit, “These days election (electoral) bonds have become their favourite. Some people used to get abdominal pain if anything happens in a transparent manner to ensure a transparent system in the country.”

This February, at the All India Congress Committee (AICC) plenary in Raipur, the Congress reiterated its stand, saying the scheme was “fatally flawed” and “fully corrupt”. The party called for a contributory national election fund to which everyone could contribute.

CPM at SC’s door

The Communist Party of India (Marxist) moved the Supreme Court in February 2018, challenging the Centre’s introduction of the scheme. The scheme, it said, “undermines democracy” and will “lead to greater political corruption”. It petitioned for the scheme to be scrapped.