Legitimizing Crony Capitalism: How the ‘Electoral Bonds’ are Legalised and legitimised Crony Capitalism

Issues of Electoral Bonds Scheme, Fund collection, and Expending the money beyond the legal unit has been seen as a trending determinants of dirty corruption in electoral politics and the latest shift of government is totally inconsistent. May It’s a hard to articulate a present developed political structure that can do without corporate-political funding, digitizing and institutionalizing parties. Yet ‘Complete ban on corporate donations’ to political parties are great matter of concern and the such related arguments leads to a pioneering attempt to elaborate an original practice of crony capitalism. Thus, The electoral bonds scheme launched by the BJP- led NDA government has failed on the transparency front though it ensured that black money was not used for election funding.

EC’s Observations on the matter

Election Commission of India has made the following observations:

  1. Electoral bonds, contrary to government claims, wreck transparency in political funding.
  2. Electoral bonds coupled with the removal of the cap on foreign funding invites foreign corporate powers to impact Indian politics.
  3. It would cause a “serious impact” on transparency in the funding of political parties etc.

The Election Commission of India (ECI) called these measures as a retrograde step and the ECI has no way to ascertain whether the donations were received illegally by the political party from government companies or foreign sources. The agency also expressed concerns that these amendments would pump in black money for political funding through shell companies and allow unchecked foreign funding of political parties in India which could lead to Indian politics being influenced by foreign companies.

Notably, The majoritarian regime has opposed EC’s with the same regard and the Supreme Court on April 05 refused to grant interim stay on the operation of the Electoral Bonds scheme. Many observers are pointed that the bulk of anonymous electoral bonds sold seem to be going to the Bharatiya Janata Party.

Maintaining that the “role of money power” is the ‘Top menace’ to free and fair elections, ‘electoral bonds’ are a regressive transformation that has further worsened the menace of ‘cronies’ running the Nation and the government has not been able to evolve a transparent method of funding political parties. Thus, The electoral bonds scheme of government has legalised and legitimised “crony capitalism” and taken away transparency from political funding which is vital to the system of free and fair elections. The shift is totally “inconsistent”, alleged Ex-Cheif Election Commissioner SY Quraishi, in an recent interview to Outlook.

The scheme were launched by the BJP – led NDA in January 2018 with an goal to make funding to political parties more transparent and allows a ‘political donor’ to purchase bonds from authorised banks which can be redeemed by parties only through registered accounts in a prescribed time frame.

Meanwhile, Quraishi, recently who has published a book named, “The Great March of Democracy: Seven Decades of India’s Elections” remarked that there is “much to celebrate” as India proved the skeptics wrong by emerging as a secular and pluralistic democracy. Despite setbacks in pre- and post-independence history our resolve to preserve democratic norms and institutions has been firm. “But our politicians are letting the citizens down due to lack of political will and lethargy,”. The Author remarked that all political parties “remain united” in their opposition to meaningful electoral reforms aimed at barring tainted legislators from contesting legislators.

Following the Economic Times report, “It is expected that enormous amount of corporate funding would be received by political parties in April and May and this would play a critical role in the elections.” Notably, The affidavit, filed by Director (Law) of the EC, Vijay Kumar Pandey, said the poll panel had informed the ministry that “certain provisions of the Finance Act, 2017 and the corresponding amendments carried out in the Income Tax Act, the RP Act, 1951 and the Companies Act, 2013 will have serious repercussions/impact on the transparency aspect of political finance/funding of political parties”.

In an RTI response to Pune-based Vihar Durve, State Bank of India has remarked in 2018, it had sold bonds worth Rs 1,056.73 crore in March, April, May, July, October and November. The sale of electoral bonds has skyrocketed ahead of the parliamentary elections by 62% as compared to last year with the SBI selling bonds of over Rs 1700 crore, This year in January and March, the bank has sold Electoral Bonds worth Rs 1,716.05 crore, the RTI reply were asserted.

So the Ex-CEC SY Quraishi criticised the electoral bonds scheme for ‘legitimising crony capitalism’ and warned of the perils of corporates donating money to political parties without any cap on the amount as a percentage of its profits. “Earlier no company could donate more than 7.5% of their last three years’ profit, that limit has been taken away altogether,” adding that the provisions of Electoral Bonds scheme allows the companies to donate “100 per cent” of their profits. “Obviously there is no free lunch…if they give money they want something back…they will be running the country,”. The scheme has “legitimised and legalised crony capitalism.

Despite the same, These issues have pragmatic and workable solutions, which have already been tested in many democracies of the world and urged the political parties to start putting self interest after national interest to solve the issues which ail the electoral system. While the government’s shift was also resisted by opposition parties and analysts who remarked the scheme was counterproductive. What could be a best way forward area or alternatives with the same regard? Giving the RO this power seems logistically efficient but also provides massive room for electoral malpractices, more so when the ROs are not from the Election Commission of India and are mere employees under the state government.

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