Electoral Bonds have become the preferred route for corporates and individuals making large donations
Soon after the then Union Finance Minister announced the Government's plan to launch Electoral Bonds (EBs) as a method of making donations to political parties, in February 2017 I had critically analysed its implications. I had also pointed out that EBs will become the preferred method for making large-sized donations to political parties due to the anonymity that it affords to donors. The EB receipt data reported by some political parties, now available in the public domain, thanks to the disclosure of their Annual Audit Reports for 2018-19 on the website of the Election Commission of India, has proved my hypothesis. RTI interventions have also revealed that there were few takers for EBs of lower denominations like Rs.. 1,000 and Rs. 10,000/- The EB receipts data shows the sharp plummeting of corporate donations made in a transparent manner as big donors seem to prefer the EBs route.
My main findings from a quick comparative analysis of the proportion of EBs to total donations received by these parties are given below:
1) According to their Audit Reports, the total amount of donations that AITMC, BJP. BJD, INC, JD(S), TRS and YSRCP received during the financial year (FY) 2018-19 from various sources such as corporates, individuals, electoral trusts and Electoral Bonds is Rs. 3,696.62, crores. Electoral Bonds receipts amount to almost 2/3rds (65.51%) of this total figure;
2) The seven political parties received between 55-87% of donations through the EBs route. No party received less than 50% of its donations through the EB route in 2018-19;
3) Two State level recognised political parties received more than 80% of their donations in the form of EBs. At 87.91%, EBs contributed the largest proportion of donations to BJD's kitty. JD(Secular) came second with 82.20% of donations received in the form of EBs;
4) TRS came 3rd on this list with EBs contributing more than 3/4ths (77.46%) of the quantum of donations received;
5) The three national level recognised political parties received between 61-69.50% of their donations through the EBs route. While the INC tops this list with 69.49%, the BJP is at third place with EBs contributing only 61.63% of the donations received. However, at Rs. 2,354 crores, the BJP received the largest amount of funding through the EB route amongst all seven political parties;
6) YSRCP received the least amount of donations through the EBs route. However this figure was more than 55% of the total contributions received by that party;
7) Only INC, TRS and YSRCP declared the amount of donations received from corporates/companies separately in their Audit Reports. Together they received less than 2% (1.45%) donations from corporates in a transparent manner. Corporate donations, when not routed through EBs have to be accounted for in the contribution and audit reports if they are above Rs. 20,000/. However, Aristo Pharmaceuticals which made a donation of Rs. 13 crores to JD(U) without using EBs is an exception. They do not seem to be fearful of making such a large donation to one political party in a transparent manner. Their certificate of contribution is included in JD(U)'s Annual Contribution Report for 2018-19.
8) At 3.74% corporate donations formed the smallest proportion of total contributions received by the INC. It was 8.11% for TRS while YSRCP received more than 10% of its total donations from corporates.
9) Electoral Trusts and Foundations also seem to have lost their charm for political parties receiving funding through the EBs route. Only one national level recognised political party and three State level recognised parties received funding through this route. Electoral Trusts contributed more than 17% (17.15%) to the INC's coffers- the largest recipient in this group. YSRCP received almost 15% (14.91%) of its donations from such Trusts while TRS received a little over 9% of funds through this route. BJD declared it had received less than 1% (0.82%) of its funds from such Trusts. Interestingly, the BJP which mooted the EB scheme did not report any receipts from Electoral Trusts.
In conclusion, the worst fears of advocates of greater transparency in political party funding like me have come true. The opaque EBs mechanism where the identity of donors remains secret has become the preferred route for corporates and individuals making large sized donations to political parties. Interestingly, not all ruling political parties seem to have received funding through the EB route. Most notably, JD(U), AAP and AIADMK have not reported receipt of any EBs in 2018-19. Similarly prominent opposition parties such as TDP, RJD, DMK, SAD, NCP, CPI, CPI-M, SP and BSP have also not received EBs during the last financial year even though some of them have received donations to the tune of several crores through other modes of payment.
Although organisations such as the Association for Democratic Reforms have moved the Supreme Court challenging EBs as a mode of making political donations, there is another way to thwart this menace. All Opposition Parties which have spoken against EBs must publicly make a pledge not to accept contributions from anybody through EBs, and abide by it. Those that have already received funding through this route, must take a pledge not to accept EBs in future and abide by that pledge. This way, there is a strong likelihood that pressure might be built on the NDA to withdraw this scheme. The alternate scheme where all donations above Rs. 20,000 must be accounted for individually and reported to the Election Commission of India is good enough to serve the purpose of transparency in political party funding, contrary to the NDA Government's thinking.