Electoral Bonds: What is wrong with political funding?
The tool was set up six years ago. Many have since called it unconstitutional, with the Supreme Court eventually agreeing and proclaiming it eroded people’s right to information.
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• MAHIMA KAPOOR
NEW DELHI: The clearest thing about India’s political funding system is that it is opaque to the public, with both politicians and electoral officers repeatedly and openly acknowledging their failure to achieve transparency. In mid-February, the Supreme Court of India struck down the electoral bonds scheme , which allowed donors to send unlimited funds to their parties of choice, and to do so anonymously.
The tool was set up six years ago. Many have since called it unconstitutional, with the Supreme Court eventually agreeing and proclaiming it eroded people’s right to information. The landmark ruling defies the stance taken by the government of India’s Prime Minister Narendra Modi. Even without electoral bonds, however, the system remains problematic. “While the proponents of political reforms were celebrating the Supreme Court judgment, we have gone back to the pre-electoral bonds system where 70% of all donations were in cash,” SY Quraishi, the former Chief Election Commissioner of India, told DW. “We are back to square one.”
India is gearing up for general elections due by May. Prime Minister Modi’s Bharatiya Janata Party (BJP) is seeking a third consecutive term in power. The election is shaping up to be India’s most expensive ever, with rivaling campaigns and state expenses for organizing the election reaching a combined cost of $14.4 billion according to the estimate by the Centre for Media Studies in New Delhi, which monitors political spending.
The Election Commission requires all political parties to disclose direct contributions larger than Rs 20,000 ($241) in their annual reports. But donors are known to break up their contributions in cash sums below this threshold, which requires no disclosure at all. And this scheme accounts for the lion’s share of political funding.
“The problem lies with those contributions which are below 20,000 rupees which nobody is talking about. There was a hue and cry about electoral bonds but these donations are also very problematic,” said Shelly Mahajan, Head of the Political Party Watch at Association of Democratic Reforms (ADR).
Election watchdogs like ADR have been calling for more transparency on funding, insisting it was the key to free and fair elections. In a study spanning 11 years, ADR showed that over two-thirds of all funds received between 2004-2015 by national and regional parties were from “unknown sources” and hence could not be traced.
Other forms of direct contributions include the sale of coupons and miscellaneous funds collected by parties during rallies. While these account for a smaller piece of the pie, they are also not regulated, which makes them untraceable. Experts say the opaque system breeds quid-pro-quo transactions and corruption, some of which have been uncovered by the Indian media.
The use of “black money” in the elections is an open secret. In India, “black money,” also known as “dirty money” refers to untaxed or illegal income. A leading authority on the black economy, retired Professor Arun Kumar of Delhi’s Jawaharlal Nehru University, estimates that India’s black economy accounts for about 62% of India’s gross domestic product. In order for this economy to survive, black money is poured into elections to bring dishonest parties and candidates into power, he wrote in a recent article for Indian op-ed publisher The Leaflet.
