The Prime Minister’s anguish over the Supreme Court declaring electoral bonds unconstitutional and the consequences of this decision needs to be considered seriously and with a broad perspective.
This is what the PM said: “There has been a discussion in our country for a long time that [through] black money, a dangerous game is there in elections. I wanted that we try something, how can our elections be free from this black money, how can there be transparency? There was a pure thought in my mind… We found a small way, we never claimed that this was the absolute way… Whether what happened in the process was good or bad can be an issue of debate, I never say that there is no shortcoming in decision-making. We learn after discussing and improve… But today we have completely pushed the country towards black money, hence I say everyone will regret it.”
He said that of the 26 companies facing action from the Enforcement Directorate, 16 had bought electoral bonds . “Of these [16 companies], 37 per cent of the amount went to the BJP and 63 per cent to parties opposed to the BJP.” This is indeed perplexing, as cause and effect do not match.
A few days ago, at a media event, Home Minister Amit Shah too had stated that the return to the pre-2018 situation is not desirable.
Both are absolutely correct.
The pre-2018 situation was not at all rosy, with 70 per cent of all donations received by all political parties together being in cash — black money, in other words, which is not only the bane of elections but the entire polity. With sources unknown, could this money be from criminals, drug lords, land mafia or even foreign money? The Election Commission of India (ECI) and civil society organisations like Association for Democratic Reforms had been demanding reform for years. These pleas went unheard for over two decades. The electoral bonds scheme tried to deal with the issue but created many problems for itself.
In a previous article (‘An opaque bond’, IE, April 8, 2021), I had written that since the bond scheme sought to do away with cash transactions, all that was needed was what I called a “30 second reform” — declaring the names of donors and recipients. If the government had heeded this simple advice, the SC may not have come down on the scheme like a ton of bricks.
The pros and cons of the SC judgment might be debated for a long time, but what we need to discuss now is the way forward.
The pre-2018 situation is certainly not acceptable. I think the government should pull out the reform proposals put forward by civil society groups and the ECI over the last two decades and come up with fresh solutions. I have been advocating a workable solution, namely, the introduction of a National Election Fund (NEF), to which all the donors can make their contributions. To make it attractive, liberal income tax concessions can be offered.
The main argument made when electoral bonds were introduced was that donors want secrecy as they fear reprisals from non-recipients.
Donations to the NEF would not face any such problem. There are two ways for the NEF to receive money: Grants directly from the national exchequer, or donations by corporate and other donors. Since many people resent the idea of being taxed to fund political parties, we may rule out the first option. But the idea of donation to the Fund is workable. We could even consider Corporate Social Responsibility (CSR) funds.
The money collected by the NEF could be distributed among political parties based on objective criteria, like their performance in the most recent election. I have suggested that if we give Rs 100 for every vote obtained by a political party, it will have enough funds to run party activities. Since the number of votes polled cannot be fudged, reimbursement based on polled votes would be accurate.
In the last general election, 60 crore votes were cast. At the rate of Rs 100 per vote, the amount would work out to 6,000 crore. Is this adequate? I’d say yes. This roughly corresponds to the amount raised by all political parties together in five years. This scheme meets all the requirements of honesty — no extortion, no bribes, no quid pro quo. Of course, all private donations could be banned if we follow this system. And party accounts would be subject to audits by the Comptroller and Auditor General. Donors who are keen to fund a political party and do not fear “reprisals” may still do so, but strictly by cheque and under intimation to the ECI, as has been the practice.
Many people ask about the operational details of this scheme: What about new parties? What about independents? All these issues can be discussed once the idea is seriously debated.
A study by the International Institute for Democracy and Electoral Assistance, Stockholm, ‘Political Finance Regulations Around the World’ (2012), shows that 71 of the 180 countries studied have the facility of state funds for political parties based on the votes they obtained. This includes 86 per cent of the countries in Europe, 71 per cent in Africa, 63 per cent in the Americas and 58
per cent in Asia. There is no reason why this system cannot be implemented in India.
The time seems ripe to address long-standing concerns about black money in elections. I appeal to the Honourable Prime Minister to immediately review all the proposals of the Election Commission in this regard. What are the reforms that they have been demanding?
Here are just the electoral finance reforms. One, prescribe a ceiling for political parties’ expenditure, as has been done for candidates and make independent audit compulsory. Two, set up an independent National Election Fund where all tax-free donations could be made. Three, enforce internal democracy and transparency in the working of political parties and bring them under RTI. Four, accept the ECI’s proposal to legally empower it to cancel elections where credible evidence of abuse of money is found. Five, debar from contesting elections persons against whom cases of heinous offences are pending in courts. Six, empower the ECI to de-register political parties that haven’t contested an election for 10 years, but have benefited from tax exemptions. Seven, make paid news an electoral offence with two years’ imprisonment, by declaring it a “corrupt practice” (Section 100 of the Representation of the People Act) and “undue influence” (Sec 123(2)).
Let me end with an assertion by the PM: “We should fight against corruption with our full strength. And this is my personal conviction.” Let’s put all our weight behind this commitment.
The writer is former Chief Election Commissioner of India and author of India’s Experiment with Democracy: The Life of a Nation Through its Elections
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