How electoral bonds fund India’s political parties
New Delhi, Apr 03: Who funds India's political parties. It is an important question to ask amidst the electoral heat ahead of the 2019 Lok Sabha elections.
The Indian law allows donors of amounts below Rs 20,000 to remain anonymous. In the 2017 Union Budget, the government announced an electoral bond scheme that allowed large scale anonymous donations. As a result, more than half of all the income of national parties in India is derived from unknown sources, says a detailed report by the Association for Democratic Reforms.
For the six national parties, excluding the Communist Party of India (Marxist), 53% of funding or Rs 689.44 crore was from unknown sources in 2017-'18. Known donors contributed Rs 467.13 crore or 36% of party income. The rest 11% came from other known sources such as sale of assets or membership fees.
What Electoral Bonds have done:
While analysing donations above Rs 20,000 for national parties, the Bharatiya Janata Party garnered an incredible 93% share or Rs 437.04 crore in 2017-'18. The Congress came a distant second with Rs 26.66 crore or 5.67% of the total known donations to national parties.
While 51% of all unknowns funds were donations below Rs 20,000 (which can be anonymous as per law), as much as 31% were made using the new instrument of electoral bonds.
An electoral bond is a promissory note similar to a bank note. It can be purchased from State Bank of India branches in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore.
Unusually for an instrument that permits such large amounts, electoral bonds can be anonymous.
Individuals and companies can make donations to a party without having their identities disclosed to the Indian voter.
The BJP dominates electoral bonds, garnering 95% of the total value of bonds purchased in 2017-'18.
That electoral bonds allow large-scale anonymous donations to parties is seen to be a significant step back in setting up a transparent system of political funding. Former Chief Election Commissioner Navin Chawla pointed out that the electoral bond scheme has actually emerged as a "greater method of camouflage" when it came to the use of black money in politics.
Electoral bonds have been available since January 2018. Their impact was immediate, pushing up the share of income of national parties for 2017-'18 (even though the bonds had been available for only three months of that financial year).