Early this year the government introduced an Electoral Bond Scheme purportedly with a view to cleanse the prevailing culture of political sponsorship.
- In its present form, the scheme permits not only individuals and body corporates, but also “every artificial juridical person,” to purchase bonds, issued by the State Bank of India, in denominations of ₹1,000, ₹10,000, ₹lakh, ₹10 lakh and ₹1 crore, during specified periods of the year.
- Issued in the form of promissory notes, once a bond is purchased the buyer can donate it to any political party, which can then encash it on demand.
Argument of political cleansing –
The government claims that since these bonds are purchased through banking channels the scheme will eliminate the infusion of black money into electoral funding.
Does the argument hold true?
- A simple reading of the scheme’s terms shows us that neither the purchaser of the bond nor the political party receiving the donation is mandated to disclose the donor’s identity.
- Therefore, not only will, say, the shareholders of a corporation be unaware of the company’s contributions, but the voters too will have no idea of how, and through whom, a political party has been funded.
- The programme removes an existing condition that had prohibited companies from donating anything more than 7.5% of their average net-profit over the previous three years. This now means that even loss-making entities can make unlimited contributions.
- Additionally, the requirement that a corporation ought to have been in existence for at least three years before it could make donations — a system that was meant to stop shell concerns from being created with a view purely to syphoning money into politics — has also been removed.
Two judgments –
- As early as in 1957, in a pair of judgments outstanding in their lucidity and prescience, the Bombay and the Calcutta High Courts warned Parliament of the perils in allowing companies to freely add to party coffers. It’s a threat, wrote Chief Justice M.C. Chagla, of the Bombay High Court, which is likely to “grow apace and which may ultimately overwhelm and even throttle democracy in the country”.
- Only months earlier, faced with a similar petition, the Calcutta High Court had made an almost identical appeal. “To the cynic it appears to be a plea of the company to have a legal sanction to bribe the Government of the day, to induce policies that will help the company in its business,” wrote Justice P.B. Mukharji. If amendments of this kind were allowed, and if joint stock companies serve as adjuncts to political parties, he added, the “man who pays the piper will then call the tune”.
- In entreating Parliament to act, the judgments were recognising a bedrock principle of democracy: that public action ought to be guided by transparency and fairness.
Concerns raised in PIL against Electoral Bonds scheme –
As petitions filed in the Supreme Court point out, the scheme suffers from at least two foundational defects.
- One, that it was incorporated on the back of a series of amendments made to legislation, including the Representation of the People Act, the Income Tax Act and the Companies Act, which were introduced in the form of a money bill.
- Two, that the scheme flouts a number of fundamental rights. The scheme is equally destructive in its subversion of the fundamental rights to equality and freedom of expression. Our courts have nearly consistently seen “freedom of voting” as distinct from the right to vote, as a facet of the right to freedom of expression and as an essential condition of political equality.
- Article 110 of the Constitution allows the Speaker to classify a proposed legislation as a money bill, only when the draft law deals with all or any of the subjects (imposition of a tax, the regulation of the borrowing of money by the Government, the custody of the Consolidated Fund of India, the appropriation of money out of the Consolidated Fund of India, and any matter incidental to the subjects explicitly mentioned in Article 10) enlisted in the provision. It is impossible to see how the provisions pertaining to the electoral bond scheme could possibly fall within any of these categories.
Ultimately, therefore, to borrow from English jurist Stephen Sedley’s formulation, the electoral bonds scheme suggests two possibilities: one, that the government doesn’t understand the Constitution; or, two, it does, and has expressly set out to transgress it.
Source – The Hindu
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