Politics is the gentle art of getting
votes from the poor and campaign funds from the rich, by promising to protect
each from the other – Oscar Ameringer
Election buzz is getting louder. A notable
change in this election from a financial perspective is that of funding of
elections via electoral bonds. The Finance Act, 2017 brought a far-reaching and
even questionable change that restricts citizens’ fundamental right to know
where the money comes from. The Finance Minister called it “substantial
improvement in transparency”. One can say this is a substantial example of
false equivalence.
Elections like everything else require
money. It is well known that power chases money and money seeks out power. One
of the greatest threats to democracy is money manipulating power. Electoral
Bonds (EB) compound these perennial problems manifold and even legitimise what
is fundamentally against the interest of citizens. Here is how the scheme
works:
a. EB are as much or more opaque than earlier
systems:
i. They are bearer instruments and a political
party does not have to disclose the name of the donors to anyone ever (as they
don’t even know it);
ii. Companies are not required to disclose the
names of political parties to whom they give bonds;
b. The cap on corporate political funding of 7.5%
of last three years’ net profits was removed at the same time;
c. F.Y. 2017-18 data shows1
i. 53% of all income (donations) of six
political parties came from Income from Unknown Sources2
amounting to Rs. 689.44 crore
including 31% from EB (Rs. 215 crore) and Rs. 354.38 crore from voluntary
contributions below Rs. 20,000 where donor details are unknown (F.Y. 2017-18);
ii. Six national political parties received 90%
of all donations from companies and 10% from 2,772 individual donors ;
iii. The ruling party got 80% of its total income
from unknown sources.
As a wise citizen, you can connect the dots.
C K Prahalad3 gave an
interesting perspective a decade ago: “I cannot but assume that private funding
of elections of this magnitude is predicted on making an appropriate return.
Given the risky nature of the investment in elections, politicians as venture
capitalists, we can assume, will not settle for a less than ten-fold return.”
In the Indian context, it is hard to
understand why companies should fund important institutions and events of
democracy to this extent with anonymity? Why should corporates not disclose how
much and where the EB were given if they are only participating in the
democratic process? Why should political parties not disclose cash and non-cash
funding? Why should political parties not be audited by a panel approved by ECI
and CAG as proposed by an ADR report? Till this happens, I am not sure if
political parties really represent people and their interest!
Opaque funding through EB could easily be
legitimising corruption for favours granted by those in power in a way that can
never be known. While politicians are never known for matching words and
actions, one didn’t expect it from this government. Clean money without source
is akin to unclean money and is a slap on the face of ‘transparency’.
__________________________________________________
1 From Association of Democratic Reforms (ADR)
website/reports.
2 Unknown sources means – income declared in
tax returns but without giving sources of donations below Rs. 20,000 and
includes donation via electoral bonds, sale of coupons, etc.
3 Seventh Nani Palkhivala Memorial Lecture,
January, 2010
Raman Jokhakar
Editor
