Encouraging secret donations (The Electoral Bonds problem in India)

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 Encouraging secret donations (The Electoral Bonds problem in India)

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• No public scrutiny of campaign funds : India faces a unique situation where the massive funds spent in elections are never totally scrutinised, due to opaque transactions. The Electoral Bonds have increased that manifold, as donor identity is also now hidden. 
• Government's reply : The CPI(M) challenged it in court, and the GoI reply was that it serves two purposes - 

1. enhances transparency in political funding, and 
2. protects the right to privacy of donors. But the truth seems otherwise - it is undermining the complementary nature of right to privacy and information. The State has to be more transparent, not less.

• Arrival of Electoral Bonds : They appeared in 2017, when the Finance Act amended four laws - The RBI Act, 1934, 

1. the Representation of People's Act, 1951, 
2. The Income Tax Act, 1961, and 
3. The Companies Act, 2013. The core logic given was - use of Bank route will reduce illegal transactions and bring transparency. And this will encourage use of white money, and KYC will ensure paper trails.

• In reality, what happened : The entire political funding transparency was killed. As per Electoral Bond scheme rules-

1. Both donors (purchasers of bonds) and receivers (the political party) have a RIGHT to not disclose the donor identity
2. Many of earlier checks have been dismantled - the cap on corporate sponsorship is gone. Now, artificial juridical persons too can make donations - so foreigners are free to donate to Indian parties. The requirement for a firm to be at least 3 years old is removed (so one can set up a firm just for this!). Shell companies come into play again.
3. Access to paper trails is impossible, as Banks exclusively will hold that. Only PSBs can issue bonds, so Central Govt. knows everything, but opposition parties no nothing.
4. Money-laundering largely happens via mainstream banks only (historical examples).

• Centre's stand at SC : GoI says that "Protecting the donor privacy is vital". The right to privacy is about individual dignity and autonomy, that right is subject to "compelling public interest" also. In this case, the info directly impacts other citizens, so must be disclosed. Public scrutiny of public officials is a must, and so it must be for political parties also. Why? Funders' actions will impact policy decisions tomorrow.
• Can parties go against funders? This simple question holds the answer to the puzzle. And worst, the public will never even know!
• A wrong logic : The GoI argued in SC that "the right to keep donor identity private is an extension of the right to vote in secret ballot".

1. The SC has already said that in the right to freedom of speech and expression, the right to information & knowledge is intrinsic. 
2. The freedom to vote (not the right to vote) is a part of Article 19 of Constitution. 
3. In a democracy like India, how can the the information not be given to voters, which is of vital importance to them?

• Complementary : The electoral bonds rules have to recognise the complementarity of the right to privacy and the right to information.
• Summary : The Electoral Bonds scheme, in present format, privileges the right to privacy over the right to information, which is wrong.

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