Many companies that faced regulatory action from the enforcement directorate (ED) Income tax (IT) department donated electoral bond work crores of rupees to ruling parties via the electoral bond root, according to data submitted by the State Bank of India to election commission of India some companies which got use government contract purchased bond for large amounts. Some new companies which were incorporated during the COVID-19 pandemic, purchased bonds worth crores of rupees just a month after starting. Was the electoral bond scheme used as an extortion tool?
To answer this question we need to understand, that data in the public domain shows that several companies that were under this scrutiny of ED, IT, and CBI brought electoral bonds. A significant portion of these was in cash by the ruling parties at the centre this raises mainly two concerns,
Whether agencies are being used to target the companies and extract funds from them.
Weather companies that were cases against them made donations to ruling parties in the hope that the investigation against them would go slow or be dropped altogether these would have to be a subject matter for deeper investigation.
Obtaining favour from the person in power is not a new concept, political party funding has been the fountainhead of the corruption in India. Companies do not donate in the public interest they donate to influence policy and law and give kickbacks to secure contracts. To be sure this was happening before the introduction of the electoral bonds scheme as well some of these transactions were taking place through banking channels and a lot of them through cash. And unless somebody was red-handed, taking fever from the political parties was impossible to establish. Therefore, the regulators had information on what was coming through the banking channels, but the electoral wants scheme made even that information opaque.
The main contention of the government council was that the scheme was bought to reduce cash. The Supreme Court then asked a few questions.
1) With the scheme has there been a ban on accepting cash? The answer was ‘NO’ So, along with the scheme the donations throw cash continued. Although it was especially forbidden to trade electoral bonds in reality there was no safeguard against trading these bonds anyone who had money in the bank could buy these bonds and these bonds could then be traded so effectively that money gets laundered. The court weighed these issues against the intended benefit of the scheme and found the loss of transparency and public rights more significant.
The names of purchasers of electoral bonds and redeeming parties were never supposed to be in the public domain. Had there not been a judgment or had the SBI not recorded the alphanumeric number, citizens could never know what was happening.
The electoral bond scheme was introduced after amending at least four laws, 3 of which the court found unconstitutional. The scheme allowed even loss-making companies to donate, a shift from earlier norms where only profit-making companies could donate a capped percentage of their profits. Why would loss-making companies make contributions?
It was to take favour of investigation from the government institutions such as ED, IT or CBI
The amendments facilitated the creation of shell companies to funnel an ominous donation to political parties. Critics including the Reserve Bank of India and the Election Commission of India warned that this could lead to generation of the black money and obscure political funding. Reducing the cash donation cap to 2000 hardly curtains the flow of undisclosed cash donations, as parties could still break down large amounts into smaller untouchable contributions. This substantial income from the electoral bond reported by parties indicates that the scheme has become a significant funding source, not necessarily reducing cash donations but adding another layer of anonymity. Surprisingly the data reveal few large corporates among the donors, raising the question about the use of shell companies for the donation. The scheme’s stated goal of reducing cash in politics and increasing funding transparency has not been met.
It was questionable that SBI claimed it needed more months to collate data, the task was later completed in just hours suggesting an attempt to misinform the court and delay disclosing information. This delay shout was significant because it AMD to push disclosure past and election date, undermining voters’ right to information as emphasized by the court 3 week deadline. Furthermore, if the alphanumeric code was solely a scrutiny feature and not meant for creating an audit trail, it was recorded on both the purchaser and depositor sites potentially compromising the electoral bonds scheme’s integrity this action by SBI a government bank could have made sensitive information accessible to the ruling party does affecting the electoral processes fairness. Both issues warrant thorough investigation and citizens have the right to understand the SBI’s role in this context.
The above article is for educational purposes and an opinion to raise a positive question on the ongoing legal development in the Supreme Court of India the issue is connected to the right to information and citizens’ right to know about the political party’s source of funding.
