How Opaque Electoral Bonds Edge Out Transparent Funding Routes for 7 Political Parties
More and more big donors of political parties, including corporates, are using the electoral bond (EB) route for making large-sized donations due to the anonymity it provides to the donors. In fact, the annual audit reports for 2018-19 of seven political parties, as published by the Election Commission of India (ECI), shows that they have received more than 50% of their donations through electoral bonds, reveals an analysis by Ventakesh Nayak. While Indian National Congress (INC) tops the list in terms of percentage, it is the Bharatiya Janara Party (BJP) that garnered maximum donations through EB route, the analysis says.
Mr Nayak, a research scholar, right to information (RTI) activist and programme co-ordinator of the Commonwealth Human Rights Initiative (CHRI), says, "The three national level recognised political parties received between 61-69.50% of their donations through the EBs route. While INC tops this list with 69.49%, BJP is at third place with EBs contributing only 61.63% of the donations received. However, at Rs2,354 crore, the BJP received the largest amount of funding through the EB route amongst all seven political parties."
"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, Janata Dal (United) (JD(U)), Aam Admi Party (AAP) and All India Anna Dravida Munnetra Kazhagam (AIADMK) have not reported receipt of any EBs in 2018-19. Similarly prominent opposition parties such as Telugu Desam Party (TDP), Rashtriya Janata Dal (RJD), Dravida Munnetra Kazhagam (DMK), Shiromani Akali Dal (SAD), Nationalist Congress Party (NCP), Communist Party of India (CPI), Communist Party of India (Marxist) (CPI-M), Samajwadi Party (SP) and Bahujan Samaj Party (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," he added.
According to their audit reports, All India Trinamool Congress (AITMC), BJP, Biju Janata Dal (BJD), INC, Janata Dal Secular (JD-S), Telangana Rashtra Samithi (TRS) and YSR Congress Party (YSRCP), together, have received Rs3,696.62 crore as donations from corporates, individuals, electoral trusts and through EBs during FY18-19.
These seven political parties have received between 55% to 87% of their total donations through the EBs route and no party had received less than 50% of its donations through the EB route during FY18-19.
Mr Nayak says, "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 (S) came second with 82.20% of donations received in the form of EBs, while TRS came third on this list with EBs contributing more than 77%) of the quantum of donations received."
His analysis also reveals that only three parties, INC, TRS and YSRCP have declared the amount of donations received from corporates/companies separately in their audit reports. Together, they received less than 2% 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 Rs20,000. However, Aristo Pharmaceuticals, which made a donation of Rs13 crore to JD (United) 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," he added.
The analysis also finds that electoral trusts and foundations are losing 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.
Mr Nayak says, "Electoral trusts contributed more than 17% to the INC's coffers- the largest recipient in this group. YSRCP received almost 15% 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."
Although organisations, such as the Association for Democratic Reforms (ADR), have moved the Supreme Court challenging EBs as a mode of making political donations, according to Mr Nayak, 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 national democratic alliance (NDA) to withdraw this scheme. The alternate scheme where all donations above Rs20,000 must be accounted for individually and reported to the Election Commission is good enough to serve the purpose of transparency in political party funding, contrary to the NDA government's thinking," Mr Nayak concludes.