Blog: Electoral Bonds Fully Transparent ? Not to Public

Tuesday, 22 November 2022

Electoral Bonds Fully Transparent ? Not to Public

Context :

Electoral bonds fully transparent: Centre / HT / 15 Oct 2022

Extract :

The Union government on Friday termed electoral bonds (EBs) an “absolutely transparent” method of political funding, even as the Supreme Court fixed a clutch of challenges to the Centre’s scheme for a detailed hearing on December 6.

As soon as the case commenced, advocate Prashant Bhushan, appearing for NGO Association for Democratic Reforms (ADR), pressed for an extensive hearing to scrutinise how EBs are polluting the electoral system in the country, besides an amendment in the law that even allows subsidiaries of foreign companies to provide funds to political parties.

Senior advocate Kapil Sibal, representing another petitioner, called EBs “the most opaque system of funding”, adding a constitution bench is ideally suited to hear this case in the wake of the impact of EBs on the constitutional mandate of free and fair elections.

At this point, solicitor general (SG) Tushar Mehta, appearing for the Centre, intervened to rebut Sibal’s arguments. “Let me tell my lords that the methodology of receiving money is so transparent that it is impossible to get any money in black or unaccounted money. Everything is transparent, nothing is in black now.”

The bench asked the SG if the system provides for where the money is coming from.

“Absolutely my lords... The system is absolutely and completely transparent,” replied Mehta, adding that there is a complete chain of how money is transferred from one account to another using the draft facility.

Mehta reiterated that the EB is a transparent system but the government is willing to consider if there are any suggestions from the top court regarding any “loophole”.

The ADR claimed that EBs are an anonymous route of funding that amounted to legitimising bribery, as corporate donors could fund the party in power in a state or the Centre as a matter of quid pro quo.

These donations enjoy 100% tax exemption and even foreign companies can donate through Indian subsidiaries, the petitioners added.

“The electoral bonds scheme has opened the floodgates to unlimited corporate donations to political parties and anonymous financing by Indian as well as foreign companies, which can have serious repercussions on Indian democracy,” the ADR claimed.

It pointed out that the Finance Act of 2017 exempts contributions by way of electoral bonds to be disclosed even to the Election Commission under Section 29C of the Representation of Peoples Act.