Unsurprisingly, many well-meaning patriotic Bharatiyas supported the Supreme Court judgement on the electoral bonds. Regrettably, most of them fail to see the real implications of that judgement. Firstly, the petitioner is the Association of Democratic Reform. The list of donors includes- Ford Foundation, Omidyar Network India Private Limited, and Tatas. That alone should have raised a flag.

Another interesting thing is the exclusive involvement of IIM Ahmedabad faculty in this entity. The most prominent aspect of this issue appears to be filing PILs. None of the prominent TV channels highlighted this fact. No one with the right mind will accept that these entities and the petitioner would somehow do things to serve our nation.

Let us examine the Electoral Bonds as they existed before being adjudicated as unconstitutional. The bonds are issued in Rs 1000/- to Rs.1,00,00,000/-. The bonds must be purchased by account payment with proper KYC norms, etc. Only DD, check payment and electronic transfer are methods of payment allowed to buy these bonds. Only citizens and entities registered in Bharat can purchase these bonds and donate them to political parties. Plus, these bonds, once purchased by the political parties, have to be deposited into the designated SBI accounts by the political parties for encashment within 15 days of the purchase. So, no one can buy and store such bonds with them. Therefore, it is clear to anyone that the money used to purchase these bonds can only be legal. No one can buy these bonds with black or illegal money. So, the premise that, somehow, these bonds are a method to facilitate payment of black money or illicit money to political parties is totally wrong.

The main issue about electoral bonds before the Supreme Court is the fact that the identity of the donors is being kept secret under this system. Plus, the electoral bonds system does not require maintenance of records if the payment was made using electoral bonds. From 2017, when these bonds were issued (Notified in Jan 2018), it was also made compulsory for political donations above Rs 2000/- to be made by cheque or account transfer or by electoral bonds. So from 2018 onwards, except for small amounts, i.e. less than Rs. 2000/- entire donations are to be made by banking processes and not by cash to sever the use of black money for political donations. Is it a foolproof system, and will it completely stop the entry of black and illegal money into the political and electoral system? Of course not.

Should there be serious electoral reforms regarding political funding and internal democracy in political parties? Of course, yes. But as things stand today, wherein the election commission fails to control political spending as it used to be under Late Sri Seshan, will any legislative measure be effective in curbing unsavoury methods of electoral spending? It does not. In such a situation, the electoral bonds are a good starting point.

Returning to the Supreme Court's main objection, which seems to be a lack of transparency, the SC's judgment appears to have two operational parts. It has held the electoral bonds system as unconstitutional and illegal and also held that the SBI has to provide all the details of donations by electoral bonds and the Election Commission of India to make these details public in a time-bound manner. 

Let us start with the latter part of the two. People who donated using electoral bonds had done so under the clear understanding and assurance that their donations would be confidential and not be made public. It is natural to assume that these donors are risk-averse. There is no other reason for them to choose this donation method. Now, that assurance of secrecy is not only removed but removed retrospectively. This will expose them to severe political risks they thought they were immune to.

In a nation where female party workers are gang raped by winning political party workers with impunity, with the entire judiciary watching like a mute spectator and most of the left-liberal media does not even report the atrocities, divulging their identities not expose them to the various dangers including vindictive political witch hunts? The only thing that they want to avoid. Most unfortunately, the Supreme Court gave the impression that these donors were all offering some sort of bribe to political parties, exposing them. One can be sure that when these names are revealed, donors will face many allegations and attacks. From now on, there will be severe apprehensions about making political donations transparent as people are not convinced of any legal assurance of protection from political vindictiveness. In short, this has done more damage to our democratic process than holding the electoral bonds as illegal.

Let us examine the matter in detail regarding the unconstitutionality of the electoral bonds. The SC mentions the RBI's initial objections to the possibility of money laundering. That is theoretically possible. In fact, it is theoretically possible that any transaction can lead to money laundering. In discussions with the government, safeguards suggested by RBI were incorporated, which we have already discussed.

 Let us see what they are again, even at the cost of repetition. The bonds can be purchased only by Cheque/DD and money transfer. Only political parties with more than 1% of the votes will be eligible to receive donations through these bonds. Not all the hundreds of political parties registered with the Election Commission can avail of this facility. These political parties are required by law to maintain accounts, audit them and submit them to the election commission. So, the risk of bonds leading to money laundering is largely mitigated.

The Government's initial response to the RBI states that RBI does not understand the core purpose of the electoral Bonds. Unfortunately, it is obvious now that the Counsels appearing for the Union government failed to convince the Supreme Court about the same core principles of keeping the secrecy and tax-paid money into the funding of the elections. As the learned solicitor general submitted, the balance of clean funds coming to the political system wherein major corporations are anyway required to disclose the actual political donations made and the political parties are also required to disclose the amount of contributions received by way of the bonds and the right for information are met by this system. But the Supreme Court clearly disagreed with that submission. This judgement also does not protect the right of privacy of an individual versus his or her affiliation to a political party. This lack of privacy will lead to a situation wherein people will be more inclined to donate in cash in the future.

To be fair to the Supreme Court, the political parties can quickly know the details of the donors as the bonds are to be handed over physically to them by someone. Naturally, this will lead to the donor's identity. This issue should have been addressed long before, and the Government clearly failed to do so.

The overall reading of the judgement does not indicate the serious consideration given to the issue of possible political vindictive measures on the donors by the political parties who do not receive donations from them. It is regrettable as that is one of the main reasons the government developed the electoral bonds system. Ironically, in this judgement, the SC discusses the Election Trusts, a desi version of the Super PACs, i.e., the Political Action Committees of the USA. One has to read some impartial (very hard to find) news items on these PACs to know the evils they represent. 

Let us realistically examine the consequences of making political donations fully public. Firstly, there will be retribution on donors if the contributions are made to the political parties in opposition in a particular location. Political parties can blackmail donors to donate money to them even when they are not in power by threatening with wild, false, and baseless allegations, etc. It will be free for all as far as political donations are concerned. There are already allegations on media houses saying that they attack those who do not give advertisements to them. At a more significant level, a corporate house with large external businesses can be forced not to donate or donate to a particular political party or dispensation by external forces if the donations are made public. NGOs and other entities can run campaigns to cancel or boycott Indian businesses that donate to any political party that these NGOs and entities do not approve. We know these NGOs' and their ideological moorings. These risks are not imaginary; such instances are now commonplace in some parts of the world. Then, businesses might be prompted to seek approval/sanction from the Western wokeists to make their donations. Very few Indian companies with external businesses will then be risk-averse to make donations to political parties not approved by the woke gangs. 

In short, all this stemmed from our failure to address the need for serious electoral reforms, especially the aspect of funding political activities essential for a healthy democracy. Hopefully, the new government elected to power will initiate the much-needed electoral reforms.

Image source: BOOM Fact Check