ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Beyond Electoral Bonds

Electoral reforms should look beyond “anonymity of donors” to make a real difference.


Who finances elections in India? Looking at the Election Commission of India’s (ECI) provisional election expenditure estimates over the past six decades—skyrocketing almost 274 times from ₹ 0.26 million to ₹ 71.38 million per constituency between 1952 and 2014—one is barely left with any doubt about the presence of some enigmatic benevolent sponsors in the backyards of the political parties in this country. In fact, a recent survey of some 2,577 politicians across Bihar, Uttar Pradesh and Jharkhand, conducted by the University of California, Berkley, shows that the preponderance of such inscrutable sources of income reaches the zenith for high-level incumbents like a member of Parliament or a lower house in the stateassembly (constituting almost 44% and 47% of their respective incomes). This finding inadvertently ends up implying that political financing in India is an economy in which the state will keep exerting a heavy hand to incentivise clandestine funding. Thus, it is no surprise that the National Democratic Alliance (NDA) government’s electoral bond scheme does not break through this opacity, despite the government’s drum-beating about its mythical claim for transparency.

Electoral reforms in India have had a chequered history that has seen the political will for enforcing and or adhering to the regulatory systems of election and political financing conspicuously missing. The electoral bonds, however, have lent the political parties the statutory immunity for denting, rather than simply circumventing, these regulations. And, the most disconcerting aspect of such sanctions is that these make the electoral system potentially an apparatus for legitimising the black income of both the “benefactor” and the “beneficiary.” For instance, by relaxing the definition of “foreign source” companies through the amendment of the 2016 Finance Act, the NDA has opened up the route for legalising the political donations even from shell companies. On the other hand, while the amendment in the Foreign Contribution (Regulation) Act (FCRA), 2010 has removed the embargo on foreign funding for Indian elections, its application with retrospective effect for 42 years has enabled political parties (the Bharatiya Janata Party and the Congress in the main) to emerge clear of sub judice inquiries on “illicit” foreign donations in all previous elections (the Delhi High Court had held both the parties guilty of such defilement in 2014). Again, there are amendments in the Representation of the People Act, 1951 and the Income Tax Act, 1961 that have legally reinstated the case for anonymous donations, though for amounts below ₹ 20,000. Yet, there remains an absence of clarity regarding the maximum number of times that donations of this magnitude can be made by any particular contributor. Ironically, all these provisions are articulated by a government that is boastful of its “surgical strike” on black money (aka demonetisation).

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Updated On : 22nd May, 2019
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