The Union Finance Ministry, the Election Commission of India (ECI) and the Reserve Bank of India (RBI) have all claimed in separate replies to a Right to Information (RTI) plea that they do not have any information about the Electoral Bond (EB) scheme, or who influenced the Government of India to launch such the controversial scheme.
Announced in the Annual Budget in February, 2017, The Government of India amended three laws relating to elections, income tax and RBI to create this new method of making monetary donations to political parties. Briefly explained, anybody would be able to buy EBs in the form of bearer bonds from a designated commercial bank for any sum of money and donate it anonymously to a political party that he, she or it (private entity) chooses.
A donor could have these bonds hand delivered through one's chauffeur or gardener and the recipient political party would not be required by law to ask any questions.
Prompted by the fact that everybody in the establishment forgot to consult the primary stakeholder, the voter-taxpayer-citizen, well-known RTI activist Venkatesh Nayak filed an RTI application with the Department of Economic Affairs (DEA) in the Ministry of Finance, seeking the following information:
- Total number of representations or petitions or communications received by the Government of India from donors regarding the need for maintaining confidentiality of their identity while making donations to political parties;
- Photocopy of these representations or petitions or communication; and
- Photocopy of the Draft Electoral Bond Scheme prepared by the department for consultation with RBI and ECI.
"Eventually, both ECI and RBI replied that they did not have any information sought in the RTI application", Nayak said in an email alert to Counterview, adding, "It appears that the records relating to the draft EB scheme are themselves being held in great secrecy. Nobody wants to acknowledge that they did any work on it."
Calling EB "a sovereign guarantee of donor secrecy for political party funding", Nayak says, the amendments "remove the obligation of political parties to record and report the identity of EB-style donors to both regulatory bodies, namely, ECI and Income Tax Department."
Pointing out how the transparency regime has been changed, Nayak says, as of today, private corporations donating up to 7.5% of their average net profits made during the immediately preceding three financial years had to be approved by a Resolution of the Board of Directors.
"Every private company making such donations is required to publicly disclose in its profit and loss account how much money is donated to which political party in a given year. The Finance Act, 2017 removes all these transparency requirements from Section 182 of the Companies Act, 2013. April 2018 onwards, a private corporation will be able to make donations from day 1 without starting commercial operations, let alone earning profits", he says.
Nayak adds, "There will be no obligation to publicly disclose the amount so donated and the identity of the recipient political party. Only the total sum of money so donated will be reflected in the profit and loss account of the company every year. So EBs are likely to become the preferred route for such companies to make donations to political parties of their choice and escape public scrutiny."
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