From Indias largest newsroom, I'm Arun George and this is the
Times of India podcast. Or transparency or political
party could be a declaration yog.
Electoral bond was former. Finance Minister Arun Jaitley
explaining in 2018. Why the electoral bond scheme
would clean up political funding in the country and bring in
greater transparency. Unfortunately, that hasn't
happened. And that's why A5 Judge Bench of
the Supreme Court is hearing arguments on whether the scheme
should be allowed to stand at all.
Retired Major General Anil Verma is the head of the Association
for Democratic Reforms, or ADR, which is one of the petitioners
that has challenged this scheme. In today's episode, he explains
why the electoral bond scheme is so biased in favor of certain
parties. He also explains why we should
know who buys electoral bonds and whether there are possible
alternatives to the existing system.
But first, let's look at what electoral bonds were created to
replace. Anil Verma says that despite the
perception that electoral bonds are the only way to give
political donations, the old ways still exist.
So the electoral bond system is just the latest way for people
to donate money to political parties anonymously.
All the other systems which were being used earlier are still
there and that is direct donations by anybody,
individual, company trust or any group.
So the basic donations used to be by means of cash, by means of
online donations, through the banks, by checks, by drafts, by
D collections, then sale of coupons, when some of the
national parties do that in a big way.
And these are basically the systems which are there.
At ADR you have documented this over years and I remember
reports that would say that that the BSP would say get donations
of 99,999 and never 20,000 so that they would not have to
disclose the donors. How transparent was this system?
As it stood. Even then, bulk of the donations
used to be from unknown sources. This percentage has been varying
like about 8 to 10 years back when I joined ADRS and then it
used to be almost 70 to 75% from unknown sources.
We still include electoral bonds also in the unknown sources
component by the way. So even now it is in the range
of 60 to 65% from unknown sources.
The rest of the thing which is from the known sources is as per
the law, any donation to political parties which is
₹20,000 and above has to be declared.
So below that it it is not supposed to be declared how much
they are getting in the form of cash and other things.
One really speaking doesn't know.
Before the creation of the electoral bond system, a popular
way for corporate entities to make payments to political
parties was through electoral trust.
So corporates like the Tatas and Bharti Group had these electoral
trusts which would make donations to political parties.
In 2014, the Election Commission told these trusts to make the
details of these donations public.
These trusts would also often donate to both the opposition
and ruling parties to ensure a somewhat level playing field.
But after the electoral bond scheme, Anil Varma says that
these trusts are now donating far less funds.
So I think there are 1516 of them in the country as of now
and they have a system wherein anybody, any institution, any
individual, any company can donate to these electoral trusts
and 99% of that donation is supposed to be transferred to
the political party for which it is meant.
Now in this they're supposed to disclose everything, the mode of
donation, who is the donor, which bank, what form and all
that. What I have noticed is that the
amount which used to be transferred to the electoral
trusts has drastically reduced now.
Over these last 2-3 years, since the time the electoral bond
scheme was introduced, because why would the corporates want
their attention to be disclosed in the electoral trust system?
Then they can get away with it in the electoral bond system.
Moving on to the electoral bond scheme itself.
Could you? Explain for somebody who's
trying to understand now, What is it about the electoral bond
system that makes it so opaque to public scrutiny?
The government says that the electoral bond scheme is through
the banks. Therefore the KYC is known.
The whole process goes through a bank because this is like a
bearer bond. Anybody can buy it, any
individual, corporate or so, and then they can deposit in
whichever political party is account that they wish to.
So the whole thing is through the bank.
That part is agreed. But The thing is that when the
electoral bond scheme was introduced by the government.
All the major acts, that is the Reserve Bank of India, the
Income Tax Act, the Companies Act and the RPA 1951.
All these acts were amended. The identity of the donor is not
known to anybody. Only the State Bank of India
knows because these bonds are dealt by them.
So obviously the State Bank of India knows.
The government also knows. And if they wish to know which
party has got how much money from which donor, it's very easy
for them to find out. There were many objections to
the scheme at the very outset, but they were also set aside in
favor of the scheme, which was pushed through Parliament in
such a way that the lawmakers in Rajya Sabha never even debated
the issue. When this scheme was being
introduced and various stakeholders were asked to
comment on it, please take your mind back to what the Reserve
Bank of India said and the Election Commission of India
said and see the various reports of the Law Commission.
But I'll just elaborate a little bit on the objections of the
RBIRBI had very clearly said that this will open the doors of
illicit funding. We all know about companies
which are illegal and they are formed to convert black money
into white. So how difficult is it to route
the money through banking channels?
It is not difficult at all. Foreign funding is not permitted
for the political parties. By amending the FCRA, etcetera.
Now, how do we know that the funding is not coming from
foreign sources and that our elections are not being affected
by that? Election Commission of India had
also raised similar objections to the scheme.
They changed their stand subsequently when the case came
up for hearing in 2019. That's a different matter.
But initially they had a lot of reservations about this scheme,
but all those were just overlooked by the government and
it was pushed through the parliament.
Anil Varma says that despite the claims of the government, the
bond scheme is hardly transparent.
In theory, only the central government and the State Bank of
India know who has bought the bonds and for whom.
But he says the public also very much has a right to know.
It's not just the laws that were amended to ensure that the
anonymity of donors was maintained.
Anil Verma says that multiple institutions that ideally should
have batted for greater transparency have reversed their
stand over the years. The SBI says KYC, details of
donors are confidential. December 20, somebody filed this
thing that you know, give us the details of the donors of the
electoral bonds to the political party.
In December 20, the CIC, the chief central Information
Commission, dismissed this appeal.
And they said that there was no larger public interest which was
involved and the applicant was not justified in interfering
with the right to privacy of the donors.
So far, the Supreme Court of India has also refused to stay
the sale of electoral bond despite repeated submissions and
requests for hearing on the matter.
And I think we have filed up to 8 or 9.
Appeals with the Supreme Court to hear the matter and you
finally it is being heard. CI CS decision of December 20 is
completely opposite to its decision of 2008 and 2013.
In June 2013, again on ADR petition, the CICI declared that
political parties are public authorities, but now it is.
Change the thing. So while the disclosure of the
identity of a donor makes contribution by electoral bonds
is not mandated by law due to the 17 amendments, the efficacy
of RTI Act two in cutting out such information has been
compromised. Now the decision of the CIC and
the reluctance of the Supreme Court.
Convey that there is no public interest in revealing details of
donors donating electoral bond. Any apprehensions about illicit
political funding are totally misconceived.
This isn't the first time that the Supreme Court or the Chief
Justice of India is hearing a challenge to the electoral bond
scheme. In 2021, the Supreme Court,
headed by Chief Justice SA Bob Day, told parties to give
details of electoral bonds to the Election Commission.
I asked Anil Varma what happened after that.
Election Commission has the data in the sense that they have
these contribution and donation reports, but the amount who is
donating and all I don't think they have that information is
only with the State Bank of and of course the central
government. The court also said that, you
know, it's very easy to sort of correlate the two and you know,
anyone who really wants to can do it.
So what is the need? There has been a little bit of
reluctance on the part of Supreme Court to hear this
electoral bonds case because it is a very sensitive case.
Thousands of crores of rupees of donations are coming in through
this thing and all the parties are involved, All of them are
recipients. I think that is why the Supreme
Court is also treading very carefully in this, though at
that time, the bench said. That it's a very weighty matter,
grave issue requires great deliberation and all that.
But they didn't do anything after that when the political
party submitted everything in a sealed porn.
And that was the end of the story.
It all went into a deep freezer. In his first statement to the
Supreme Court before the hearing of the case started.
India's Attorney General R Venkataramani submitted that
citizens do not have a right to know the political funding
through the electoral bonds. Under the constitutionally
guaranteed right to freedom of expression and speech.
Venkataramani argued that they can be no general right to know
anything and everything without being subjected to reasonable
restrictions. AD Rs Anil Verma does not agree
and says it really raises the question of whether political
parties are answerable to the people or not.
More importantly, given the money paid by the nation's
citizens are being used to fund the system, he says.
We are entitled to greater transparency.
Ironically, the printing of these bonds and the SBI State
Bank of India's Commission for facilitating the sale and
purchase of the bonds is paid from the taxpayers money by the
Central now given that the people's money is being used to
give benefit to political parties.
It again raises the question whether or not the political
parties are answerable or accountable to the people.
Our standard is that the citizens have a right to know
where the political parties are raising funds in a legitimate
manner and not using the electoral bond scheme just to
fill their coppers, and the public interest should outweigh
the claims preventing such crucial information from being
accessible. It also needs to be emphasized.
That political parties are operating in public domain and
transparency in their working and financial operation is
essential for citizenry to access, for exercising an
independent and informed choice. Therefore, this argument, which
the Attorney General has given it, doesn't hold much water.
I mean, they say that the public doesn't have the right to know.
Basically, it's your money paid as various taxes that's paying
for the electoral bonds, and yet you can't know who's buying the
electoral bonds. But the central government knows
who's paid the money and who's received it.
It can make sure that no illegal funds are in the political
funding system. Shouldn't that be enough?
Well, for one, it implies that only one party, the one in power
in the central government, can know who's donating to whom.
This, in turn, could mean donors to other political parties could
be targeted. But more importantly, at a time
when industrial houses are accused of getting undue favors
from governments, AD Rs Anil Verma explains why it isn't
enough for just the central government to know who the
donors are, how much they're giving, and to whom.
The main thing is tell who are the donors.
That is all because these bonds are sold in the denominations of
1,10,00,000, one lakh and 10,000 and so on.
Bulk of the donations are in the 1,00,00,000 denomination.
So who's doing that? It is very obvious that it is
the corporates who are doing it. If we want our policies and
systems and everything to be made by some corporates who have
a quid pro quo arrangement with the political parties, then that
is how the democracy will run. But is that really the way we
want things to go? At least we don't think so as it
stands. A total of 24,000 electoral
bonds have been sold so far and they're worth 13,700 crore
rupees. This is between 2000 18 and July
2023. A majority of the electoral
bonds bought, which is over 50%. Were worth over ₹1,00,00,000.
Anil Verma says that as it stands.
Parties in power, within the central government or in states
benefit the most. From the electoral bond scheme,
he explains why. In two thousand 2122, the share
of electoral bonds of the total income of eight national parties
from unknown sources was 83%. So 83% from electoral bonds
only. It has become the preferred
thing. From our assessment, it is
common practice that whichever party is likely to win elections
gets more funding from the corporates.
Especially if you analyze the electoral trust scheme, you'll
find that some of the trusts they are donating to both the
major parties. To a larger extent to BJP, to a
lesser extent to Congress, because for the simple reason
that BJP is in power. So if tomorrow some other party
wins the election, the corporates will start donating
more to them. Even now, some of the parties
say that we are opposed to the electoral bond scheme just
because they are from the opposition now.
But they are all receiving funds from electoral bonds.
If they are opposed to it, then why are they receiving it?
And they're receiving a good amount, substantial amount.
Even the regional parties are receiving substantial amount.
So there is a bit of a duplicity and hypocrisy in this whole
thing. You're also saying that
basically this system as it stands would favour A ruling
party, not necessarily the central one.
But even at the state level it would favour A ruling party
rather than non ruling party. Yes, yes.
We have carried out a study amongst the regional parties or
this thing. TMC has got the maximum amount
of money from electoral bonds. Similarly, their TTP has got.
Similarly, in Tamil Nadu, DMK has got, in Orissa BJD has got
and at the central level, BJP has got.
So it is a clear indication that ruling parties are getting
electoral bonds, not surprisingly.
The BJP, which introduced the scheme, has got.
The most money till. Date through the Electoral Bond
scheme. It has received over 5, 1000
crore rupees. So far, to put that amount in
perspective, 5000 crore rupees was the amount set aside.
To give every 15 to 17 year old in the country and every senior
citizen in the country. Doses of COVID-19 vaccine in
2022, in comparison the only other national.
Party that comes close to the BJP is the Congress with just
under 1000 crore rupees in the same period.
Anil Verma says one thing this difference in funding does is it
ensures that some parties have a lot of money to spend on an
election campaign while the others don't.
This also means that if you're deciding to contest elections,
you'd. Need a lot more money just to
compete, which in turn eliminates the rise of
candidates not from the biggest. Political parties.
So the stark difference in the share of donations coming to
national parties reflects poorly on the level playing field and
fairness. The direct corporate donation
declared by BJP are at least three to four times more than
the total corporate donations of all the other national parties.
In financial year 1718, it was more than 18 times that of all
the other national parties, YSRC.
An increase of 4906%, JDU 1605%, TRS 813% and BJD 104%.
Now you just see this rise from corporate donations.
It's all because of the electoral mode, so the whitening
gap. Between the funds which have
been declared by the various political parties is more grave
when the figures are compared between the national and the
regional parties. The 2017 reforms could not
address the issue of lack of level playing field and unequal
access to resources amongst the recognized political parties.
The inequity that we observe here is not marginal.
But significant enough to pose a threat to the ideals of
democracy. This also discourages
meritorious candidates, especially those from the
marginalized groups and women who are short of resources.
There is no comparison between the huge difference which is
there in the amounts received by the ruling parties versus the
others, so obviously the level playing field has been skewed.
One would argue, or maybe even certain parties would argue, it
has always never been a level playing field.
There's always been a party that has had an inherently huge
advantage over others. Would you say that this gap is
bigger now? Yes, yes, yes, yes.
This type of difference was not there and this is increasing by
the year it is going on increasing by the.
As Anil Verma has already pointed out, there's no way for
a common man to know who's funding which party and.
Possibly. Which policy?
He says. Even a simple fix in the scheme
would make it dramatically transparent.
I personally feel that even if just the identity of the donors
is disclosed in the system, it will make a huge difference if
it is there in the public domain.
If they're on the Election Commission website, then
everybody's aware if you're OK. So that would at least impose
some portion on the political parties as to whom they're
accepting funds from. That is the main thing right
now. Nobody knows.
Anil Verma says there is. No ideal.
System of political funding. But the electoral bond system as
it stands in India is unique and as opaque as it gets.
And more importantly. It hasn't really stopped.
The inflow of illegal funds into the political system.
There can be no ideal system of political funding.
Of course, this electoral bond scheme itself is a unique thing.
It is not there in any other country.
I mean, there is no foolproof system, but yes.
In the Law Commission reports and various other reports, they
have all said that why should each and every PESA received by
a political party not be accounted for?
And you are seeing what is going on, horse trading, hotels,
moving MPs and MLAs here and there and all that which goes
on. Do you think that is all done
through the banks? What money is being used for
that? If the Supreme Court verdict
does go. Against ADR again like it did.
But what for you are the big worries if the electoral bond
system is allowed to stay in its current form?
Our biggest worry is this, only that we do not know what source
of funding is. We have also been saying that
there is a need to have a ceiling on the expenditure,
which is done by the political parties.
I mean, imagine for a country like ours, I understand that our
GDP is increasing and we are developing, but is it really
required that we spend more money than what US spends in its
presidential elections? That is again my personal thing.
Is it really required? Do we need to spend so much
money? Is there a serious case for
that? Public funding or state funding
of elections as people talk about?
But technically we do have a ceiling, right?
It's just that nobody follows. No.
No, no, no, no, no, no. Please don't mix up the things.
That ceiling is for candidates. They cannot spend more than
40,00,000 in the state assembly elections and 75,00,000 in the
general elections. But for political parties there
is no ceiling and the bulk of the expenditure is done by the
political parties. And even these candidates, of
course we know they spent 10 times or more.
Of course, everybody in their official statement states they
have never crossed more than 50 to 60% of the authorized left.
You remember Atal Bihari Bajpaiji had said in the
Parliament that we all start our career with law with a lie that
is this expenditure statement. Today's episode was produced by
Jayraj Singh and Anuja Singh. For a daily spotlight on people,
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