Hyderabad: Last week, Parliament cleared certain proposals made in the Union Budget which have the potential to leave a long-lasting impact on politics, economy and citizens. The most important proposal relates to the creation of a new instrument called time-bound electoral bond. This is designed to be a bearer instrument that can be bought by anybody, but can be redeemed by only recognised political parties by depositing them in their bank accounts.
Justifying the creation of electoral bond, finance minister Arun Jaitley said that electoral bonds would bring transparency to election funding. Analysts refuse to believe this and claim that electoral bonds increase opaqueness in corporate donations. There are mainly four concerns:
There is no cap on corporate donations through electoral bonds. In the original version of the Finance Bill, corporate donations were capped at 7.5 per cent of the average profit of three years. If a company had an average profit of Rs 1 crore for three years, they could donate Rs 2.5 lakh. That cap has been removed.
Donations through electoral bonds need not be revealed in the profit and loss account of the company. Banks need not reveal the details of the purchasers of electoral bonds.Political parties are exempt from reporting donations received through electoral bonds.
These provisions would ensure a complete anonymity to the donor and recipient of the electoral bonds. This is as good as dealing in cash but the money is transferred through legal channels.
While the government has not revealed the maximum term an electoral bond can be held, the longer the time-limited bonds are allowed to be held by the purchaser, the more it could become a conduit for stashing black money.
Since quid pro quo deals between businessmen and politicians were said to be one of major sources of funding for elections, an analyst said the lack of transparency in electoral bonds could amount to legalizing such deals made at the level of the political party.
Former chief election commissioner S.Y. Quraishi doesn’t believe that electoral bonds could end corruption in electoral funding. The ideal solution, according to him, would be setting up a National Electoral Fund to which everybody can contribute openly. The fund administrator could allocate the money to all registered parties in proportion to the votes they polled.
Notwithstanding these concerns, electoral bonds have certain positive spinoffs. These could be a part of the Narendra Modi government’s war on dealing in cash. With electoral bonds giving the option of donating through legal channels and gaining income deduction while remaining anonymous, the corporate could shun cash donations.
According to a businessman, individual political leaders could accept donations and bribes through electoral bonds and reroute them through the party for their regular political activity.Electoral bonds may not be useful to individual politicians who want to make their personal fortune.
“In a nutshell, electoral bonds have legalised lobbying in India,” he said. He added that such a mechanism will also be of great help to corporates as they don’t have to create black money to give donations to political parties. While it may not end corruption, he claims that it may make it a shade better.