Let it go lock, stock and barrel as it is ‘unconstitutional’

PROFESSOR JAGDEEP CHHOKAR, former Director In-charge of Indian Institute of Management, (IIM) Ahmedabad, is one of the founding members of Association for Democratic Reforms (ADR). He earlier worked with the Indian Railways as a mechanical engineer and manager for over a decade. He did his Ph.D. from Louisiana State University, USA and has taught at Universities in Australia, France, Japan and the US. In an interview with MOHAMMAD NAUSHAD KHAN, he said, “We filed an application to stay the electoral bonds scheme so that these should not be issued from April 1 to 10, 2021, to fund the state assembly elections but it was turned down by the court. Since then, six applications for early hearing have been filed. The last hearing was on October 12, 2022, and the case is now expected to be listed for hearing on December 6, 2022.”

According to a study conducted by the Centre for Media Studies, it is estimated that the Lok Sabha election in 2019 cost `55,000 crores. This was the world’s costliest conducted election ever and the share of the ruling party has been half of the said amount. How would you like to respond?

This estimate of `55,000 crores by the CMS is the only quantified estimate that is in the public domain but I am not sure this is really accurate. The reason I say this is because the CMS themselves have a chapter titled “Dilemma in Estimation” in their report, which ends with the following paragraph,

“The estimate given here are indicative for the front-end expenditure after the ECI notification. The “other expenditure” comprise the one before the notification, ones not cover under the code, and to do with the in shifts or migration of leaders between parties and for getting nominations. This cannot be quantified and is also much beyond the realm of poll campaign.” (p. 4)

My own guess is that the actual expenditure must have been much more than `55,000 crores but I do agree with the CMS that estimating the total expenditure on the election is actually impossible unless political parties and candidates really come clean.

If we talk of transparency in elections, political funding is an important element. Do you think electoral bonds have further aggravated the problem of lack of transparency?

Electoral bonds are the final nail in the coffin of transparency. Electoral or political financing is a very murky affair. There is no country in the world where it is completely transparent. There are degrees of transparency and most mature democracies are far more transparent than it is here. Nevertheless, from the past several years, corporate donations are open. It is OK because political parties actually need money to run their affairs. They have employees, offices, and so on. They need money and there is nothing wrong in it.

However, the question is: From where and how does that money come? It can be known provided political parties are forced to comply with a full bench decision of the Central Information Commission, the highest statutory body in the country for the implementation of the RTI Act, on June 3, 2013, that six national political parties (BJP, Congress, BSP, NCP, CPI, and CPI-M) are public authorities under the RTI Act which these six parties have been blatantly defying for over nine years now. The case is in the Supreme Court since May 2015.

It is generally argued that electoral bonds cannot be transparent and anonymous at the same time. How would you like to respond to that?

The position of the government is that the electoral bonds are like bearer bonds, the identity of the donor is anonymous. I have been writing and speaking, saying that I am looking for a dictionary, which says that transparency and anonymity are synonyms.

The scheme on electoral bonds was announced in February 2017. We, ADR and another civil society organisation, Common Cause, filed a petition in the Supreme Court, in September 2017, challenging the constitutionality of the scheme, among other things. The petition was admitted, and heard inconclusively.  We filed an application to stay the electoral bonds scheme so that these should not be issued from April 1 to 10, 2021, to fund the state assembly elections but it was turned down by the court. Since then, six applications for early hearing have been filed. The last hearing was on October 12, 2022, and the case is now expected to be listed for hearing on December 6, 2022.

There are other things about electoral bonds, which are quite disturbing. For example, the scheme says the bonds will be anonymous and therefore untraceable. This was busted when a journalist bought electoral bonds worth 1000 Rupees and discovered that if you put it in ultraviolent light, it shows up a unique alphanumeric number.

Anonymity, or the way it is supposed to be operationalised in the scheme, is another critical issue. It is said that the State Bank of India will be the only body, which is authorised to sell these bonds, and they will collect all the KYC details from the person who buys it. The scheme also says that the SBI will not share this information with anybody unless there is a specific order from a court of law.

The first question is if they are not going to share it with anyone, why are they collecting it? Then it dawned on people that this could have other implications, which would lead to chocking the funding for all opposition parties regardless of the ruling party. Whichever is the ruling party, it will have the option of chocking the funding for all opposition parties. This was an apprehension that I wrote at that time and which has come out to be correct.

Experts have argued that electoral bonds favour the ruling party. Is it true?

In the first tranche of electoral bonds, something like `212 crore worth of electoral bonds were sold. Ninety-five per cent (95%) of them went to the ruling party. Now the percentage is about 70 to 80 per cent. The fact is that it permits anybody, let us say a company in the USA or elsewhere, to buy electoral bonds if it wants to get some decision made which will help them. They have no business in India but they expect that something may be possible. Therefore, they set up a subsidiary in India and that subsidiary is free to buy electoral bonds and give it to any political party because the subsidiary is an entity registered in India.

This has been made possible by amending the Foreign Currency (Regulation) Act retrospectively; a law that was repealed eight years earlier was amended. This is unheard of and is akin to doing knee-replacement surgery on a person who has been dead for eight years! It is therefore believed that these companies can influence our decision-making through donations. These are the dangers of electoral bonds.

Can you talk about the way in which legislation related to electoral bonds was rolled out?

There was a lack of transparency in the Indian political funding system. Now there is total opacity and the ruling party enjoys special dispensation. It means perpetuation of political party in power. It also means putting the nation at risk and it is for the court to decide what they want to do.

We have also challenged the constitutionality of the electoral bonds. It was passed as part of a Money Bill. A Money Bill refers to money, which is to be spent from, or accrues to, the Consolidated Fund of India. In this case, the government is not even mentioned in the scheme. XYZ will buy the bond, State Bank will sell the bond, and XYZ will give it to political parties A, B, C.

Where does the government come into this? There is no way under the sun that it can be part of a Money Bill. It was put in the Money Bill so that it is not discussed in the Rajya Sabha where the government did not have majority at that point of time. It is unconstitutional and everyone who has said anything or written anything about it, has opposed it except, of course, the ruling party. But we have to wait and see what happens next in the Supreme Court.

Will the Electoral Bonds Scheme survive judicial scrutiny and what is your expectation from the Supreme Court?

It is obviously impossible to predict what view the Supreme Court will take but we expect the court to strike down the scheme on grounds of it being unconstitutional.

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