Opinion

Electoral bonds: Choosing not to rock the boat

S Murlidharan | Updated on April 04, 2021

Apex court Playing it safe   -  The Hindu

During every election, the issue of electoral bonds comes to the fore, and there is a discussion around the most appropriate mode of political funding.

Late Arun Jaitley, the then Finance Minister, argued that since electoral bonds (his brain child) had to be bought from SBI either through cheque/draft/electronic payment, the festering problem of cash haunting our elections would be a thing of the past. But cash still rules the roost. And big corporates prefer the electoral trusts over electoral bonds.

With the ongoing five Assembly elections, the Supreme Court was requested by the Association for Democratic Rights (ADR) to stay the issue of bonds from April 1 to April 10 2021. The Election Commission, which earlier had its reservations, did a volte face now and said such bonds would curb the use of cash for political funding. But we know that bank deposits per se don’t represent white money. If that were the case, the Modi government would not have frozen banks accounts of two lakh shell companies in 2017 and not started scrutinising the deposits made in the aftermath of demonetisation

Prashant Bhushan, the petitioner in the SC case and founder of ADR, is right in saying that the anonymity conferred on donors is the worst feature of the bond. SBI which is the sole selling agency of electoral bonds would know the source of funds for the purchase. And it can hand over to the law enforcing and investigative agencies such details should there be a suspicion of illicit money finding its way into the electoral arena. But being a bearer bond without any ownership apparent from the bond itself, it is possible, like Bhushan argues, for a crook to purchase the bond in the secondary market and give it to the political party to curry favour with it.

The Chief Justice of the Supreme Court wondered if the bonds could be used for extraneous purposes including promotion of terrorism by political parties receiving them by way of donations. Well that is not a risk unique to the electoral bonds. Political parties must be made to disclose the names of the donors. The ostensible reason for non-disclosure both in company accounts (donors) and in the political party accounts (donees) is that there might be reprisal against the donor by the political party not getting the donor’s largesse when it comes to power. This is a self-serving argument.

By refusing to stay the sale of bonds from April 1 to April 10, the Supreme Court judges in their verdict chose not to rock the boat. Their reasoning was that there was no evidence of electoral bonds adversely affecting our elections ever since they were introduced in 2018.

They have not affected our election adversely because they have had very few takers with still cash and electoral trusts ruling the roost. But the SC ought to have struck down the most obnoxious feature of the bonds — anonymity and opacity. There is no reason why they should be bearer bonds. Name of the owner should be writ large on it. SBI should be mandated to handover all the details of the purchasers of electoral bonds as part of the Annual Information Report (AIR) regime.

For example, the fear of coming to light through the sub-registrar if the property value registered is more than ₹30 lakh makes the buyer and seller of immovable properties behave. The same sense of responsibility must be instilled on buyers of electoral bonds and their beneficiaries the political parties.

The writer is a Chennai-based chartered accountant

Published on April 04, 2021

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