A bull may have good qualities, but you will never bring them out by waving a red flag in the face. This is often suited most to the precarious situation of expecting the national or state legislature (read it as a tag team of political parties) to self-tighten the noose of political funding and ensuring the elections in most idealistic ways. Consequent to this, it is also not possible to expect the class of T.N. Sheshan at display in regulatory bodies. Therefore, we often find election funding instruments as a major grey area in our politico-legal landscape.
Taking a cue out of this, and of course to declare a transparency and fairness in our election funding, a new instrument named Electoral Bonds was introduced in 2018. They allow individuals and corporate entities to make donations to political parties anonymously. These bonds can be purchased from authorized banks and are then submitted to political parties, which can encash them within a specified period. The identity of the donor remains confidential, creating a veil of secrecy around political funding. A report suggests that over a period of 2018-2022, massive chunk of money amounting to Rs 9,208 crore was generated through these bonds. The lack of disclosure requirements regarding the identity of donors stands out to be its most prominent feature out of all for this substantial source.
Furthermore, electoral bonds have led to a shift in the dynamics of election campaigning and has opened the door ajar for diverse funding options. With the availability of large sums of money through these bonds, political parties may have an advantage over smaller parties or independent candidates who do not have access to similar funding sources.
Any innovation brings along with it certain positive factors and ease of life as well. The electoral bonds provide anonymity to donors, protecting them from potential backlash or reprisals for their political contributions. This can encourage individuals and corporate entities to participate in political funding without fear of retribution. The electoral bonds have consistently helped to shift political donations from cash-based transactions to a more formalized system. By channelling funds through authorized banks, electoral bonds aim to encourage legitimate and transparent sources of funding.
Furthermore, electoral bonds provide a streamlined process for making political donations. They can be easily purchased from authorized banks, making the transaction more convenient for donors. This can potentially increase the ease of political funding, encouraging more individuals and corporate entities to contribute. Consequent to this, the proponents highlight that electoral bonds can contribute to political stability by ensuring a steady flow of funds to political parties. This can enable parties to focus on their ideological objectives and policymaking rather than constantly seeking funds for electoral campaigns. Regional parties, especially those with limited access to traditional sources of political funding, can see electoral bonds as an opportunity to compete on a more level playing field with national parties. The availability of funds through electoral bonds can help regional parties bridge the financial gap and effectively challenge larger political entities during elections.
However, the USP of electoral bonds of anonymity brings in certain doubts about their actual effectiveness. We can gauge that this secrecy can lure the inflow of illicit funds into the political system, undermining transparency, and accountability in political funding. Electoral bonds raise concerns about the potential for corruption and the influence of undisclosed corporate interests on political parties. Without knowing the identity of donors, it becomes difficult to assess any potential quid pro quo arrangements or undue influence on policy decisions.
The constant monitoring of money inflow from clean source and the regularization of undisclosed funds pouring in chunks in our political system may cripple the hands of agencies due to lack of any direct evidence establishing a money trail. Without information about the funding sources of political parties, citizens may find it challenging to assess the financial interests and potential conflicts of interest that parties may have. Keeping the eyes closed doesn’t take away the danger. The rapid advancement of financial technology poses challenges for the implementation of election laws. As new digital platforms and tools emerge, election authorities need to adapt and update their regulations to address issues such as online campaigning, cyber-security, and the use of social media. Keeping pace with technological advancements requires constant monitoring and periodic updates to the laws.
Electoral bonds and election laws in India are interconnected, shaping the landscape of political funding and electoral campaigns. It is crucial to strike a balance between promoting legitimate sources of funding and ensuring transparency, accountability, and fairness in the electoral system. Continued discussions, reforms, and public participation are essential to address these concerns and strengthen the integrity of India’s election laws. India’s election laws form the backbone of its democratic system, aiming to ensure a level playing field, fair competition, and transparent governance.
The introduction of electoral bonds has brought a new dimension to the political funding landscape. It has brought all the major players like corporate entities, authorized banks, political parties etc in a common circular loop, with the aim of preserving donor anonymity while facilitating legitimate contributions. The underlying principle was to encourage clean and accountable funding, thereby reducing the influence of black money and illegal donations. But what remains to be seen is that in the face of challenges, does our system have the stamina within to take the bull by its horns or else allegations remain the soup of primetime TV debates.
Dr Deepankar Sharma works as an Assistant Professor of Law (Senior Scale) at Manipal University Jaipur and as an Honorary Fellow at Asian Institute of International Financial Laws at University of Hong Kong. He is a member of Network of Indian Competition Experts at Competition Commission of India. Dr Vini Kewaliya is working as an Assistant Professor of Law (Senior Scale) and as Assistant Controller of Examinations at Manipal University Jaipur.