A funding mechanism designed so that only the ruling party in Government knows the identity of fund contributors
Interesting and critical political developments in India, all based on the
Electoral bond news stories that legally allowed political parties to get secret funding from Corporate donors.
I have already briefed about Electoral bonds in my earlier article, highlighting that Electoral bonds promoted an obscure form of funding that was designed in a way that the public cannot know the particulars related to who provided electoral funding to political parties with donor details kept anonymous.
Only the ruling Bharatiya Janata Party (BJP) had the power to know all these particulars unknown to everybody else, with them just needing to contact the issuing bank of electoral bonds; the State Bank of India, to get all particulars about who donated, how much and to which political party.
What are India’s electoral bonds, the secret donations powering Modi’s BJP?
Grand share of electoral funding received by ruling Dispensation - BJP
The end result of all this is that BJP obtained 50% or half of the electoral funding from Electoral bonds, procuring Rs 8,252 crores from a cumulative total of Rs 16,492 crores of electoral bond funding encashed by political parties.
BJP’s main opposition party, Congress received Rs 1,952 crores; that’s 11.84% of the encashed electoral bond amount, and Trinamool Congress(TMC) received Rs 1,705 crore,ie, 10.32% of electoral bond funding. Other parties received even smaller and lower percentages of electoral bond funding.
Untransperant political funding achieved through electoral bonds is now found to be unconstitutional
The electoral bond scheme has recently been scrapped as the Supreme Court has declared it as unconstitutional.
However, this scheme allowed political parties to obtain funding from donors who remained anonymous to everyone but the ruling BJP dispensation for more than 6 years, from 1 March 2018 to Jan 2024
A victory for democratic principles
It should be noted that the country’s Central bank, Reserve Bank of India (RBI), opposed this but even then BJP Government under Prime Minister Narendra Modi validated this untransparent scheme claiming that it brings transparency to the political funding mechanism allowing donors to donate money to political parties of their choice anonymously.
Note these electoral bonds were issued by State Bank of India(SBI) and not the Reserve Bank of India (RBI) which is unusual as RBI is the highest financial authority that prints India’s National currency and Electoral bonds being a bond instrument with monetary value should have been authorized to be issued by RBI.
So, the Government authorizing a lower bank to issue electoral bonds does undermine the authority of RBI and sets a wrong precedent.
The Secret is made public finally with Electoral bond funding details revealed!!!
All this makes for another story, but coming back to the point of what all this has amounted to is finally known with SBI having been forced by Supreme Court orders to release details of electoral bond donors who purchased these bonds and the political parties that encashed them.
It should be again noted that this proved a very hard task as SBI tried its best to not release this data at least not before upcoming elections scheduled to happen this April. SBI was batting to protect electoral bond funding details to be kept hidden from the public under BJP Government's directions.
Electoral Bonds | SBI’s unfortunate bumbling
Releasing this data quickly was crucial because Central Government main elections are upcoming in April and there were voters, Indian Citizens who wanted to know details of the Corporate funding that political parties received.
Since the ruling BJP party received the largest amount of electoral funding, a lot will be known about what happened behind the scenes that had Corporates and individuals linked to Corporates donate money to BJP.
Electoral Bonds: Meet BJP's biggest donors
Indian Citizens were waiting for these details to be furnished to know if this untransparent electoral scheme allowed corruption to flourish with the ruling party in Government obtaining secret funding from Corporate Entities and rich business individuals through certain unjustified and unfair means.
Although SBI delayed releasing the Electoral bond data, it finally disclosed this information to be publiahed in the public domain after some delay and more summons with strict orders from India's Supreme Court. All this data was finally released and put out in Election Commission's (EC) Website on March 21st.
EC makes public details of electoral bonds submitted by SBI, including bond numbers
Blow the lid off Electoral Bonds fully
Flood gates of corruption, black money flows opened up with ELectoral bonds
Independent journal publications funded by its readers, like Scroll, newslaundary, reporters collective and others who feel obligated to report the truth analysed this data and enlightened readers on how electoral bond scheme was used to the most advantage by BJP in extorting funds secretly from Corporate Entities and rich individuals by blackmailing them.
Most companies donated to BJP, after they were threatened by Central Government investigative agencies, Enforcement Directorate( ED) and Central Bureau of Investigation (CBI) to donate crores of money to BJP or face corruption charges for engaging in money laundering, tax evasion or other currupt practices for which they will be persecuted.
After raids by central agencies, these 21 companies bought electoral bonds
Amid ED probe pressure, companies opened wallets for electoral bonds: Report
BJP made ‘bribes’ legal via electoral bonds: Congress
Legal route through which Black money made waves into India's political machinery
Ease of flow of Black Money increased under this electoral bond scheme as is evident with companies having donated funds much more than their profit earnings. What's more astonishing is that companies that were making losses donated crores of money through electoral bonds.
All this money is untaxed, unaccounted-for money; Black Money. No one knows, how it was obtained and it could have been generated by illegal means.
Electoral bonds: 33 loss-making firms donated Rs 582 crore, 75% went to BJP, says report
Black money flows were possible also because obscure companies with no business activity and thus no business revenue earnings were permitted to donate to political parties purchasing electoral bonds. These companies are called Shell companies and their only function is to route money they get from other entities, mainly offshore companies.
Foreign companies were allowed to donate to political parties through their subsidiary companies in India, earlier this was not permitted.
So, naturally, many companies suddenly came up as they were created only to buy electoral bonds.
Just think, this makes it harder to find out who is the real electoral bond purchaser donating funds through these shell companies.
This only hid visibility of the actual money donator with money trail transactions made complicated, making it harder to track the actual donator.
New firms bought crores of electoral bonds within months of formation
Companies engaging in illegal activities donated crores of money, with the owner or controller of the company first jailed and then released post-purchase of electoral bonds.
The Gold standard style of corruption with ‘Quid Pro Quo” relationships between companies that donated through electoral bonds and the receipt political parties that granted these companies contracts for building of mega infrastructural projects were deciphered.
UP firm gave Rs 10 crore to BJP less than a month after bagging contract for Kashmir tunnel
A step further than this the Government under BJP also made favorable policy implementations for companies that donated them crores of funds through electoral bonds, this too falls under the classic ‘Quid Pro Quo” style of curruption.
This is nothing but enormous amounts of invisible bribery by companies to win favours from Government powers which is corruption.
Bharti group’s Rs 150 crore bond donation to BJP coincided with Modi government’s telecom U-turn
BJP made ‘bribes’ legal via electoral bonds: Congress
Unhealthy Crony Capitalism where few players monopolize and run a Nation's economic machinery
Ouch!! Earlier, I have mentioned that electoral bonds encouraged crony capitalism, where companies that donated crores to the Government were the Government's favorite candidates to do business.
They get special favors, and this could be dangerous to the country's economy, environment and even democracy as these companies get power by controlling a country’s National economy, natural resources, job market, public amenities, infrastructure and even influence Government policies.
The Criminal style of BJP extracting money from Corporates is unprecedented
However, electoral bonds have gone beyond just encouraging Crony Capitalism, they have allowed the BJP Government arm twist and blackmail companies accused of corruption and extract crores of electoral bond donations for themselves.
Being in power came in handy for the saffron party as Central Investigative Agencies, the ED and CBI were available with BJP to be exclusively used to conduct raids, and searches and threaten companies.
Electoral Bonds case: Activists call for SC-monitored probe into 'corporate-political nexus'
The scale of unfairness simmers red hot because consider this, Companies that are making losses and thus paying low salaries to their hardworking employees are finding money to donate to Government through electoral bonds???
Electoral bonds: The art of extracting wealth from loss-making firms
BJP has been okay with shaking hands with the corrupt and extorting their money!!
How can this be good for the Indian economy???
BJP Government was fine to accept black money and money obtained out from the proceeds of the corrupt activities of tainted companies, is this not corruption running on steroids???
Yes, other parties too obtained electoral bond funding and some by similar corrupt means, but it's not at this massive scale of BJP. It should be noted that it's the BJP party that got 50% of electoral bond funding and other parties got only a small portion of electoral bond funding in comparison, as explained the main opposition Congress party received just 11%.
It was the BJP Government that introduced this opaque form of funding having evil intentions, with secret funding where only the BJP party controlled by PM Narendra Modi was in the know-how of which donor donated how much to which political party.
Extra money power that enabled the BJP to weaken up India's Democracy!!
Finally, electoral bonds have done severe damage to India's democracy with it being one means through BJP party obtained loads of disproportional funding to power its activities. It is no surprise that BJP party is India's wealthiest party having money power not only for putting out advertisements, conducting political campaigns but also to buy mainstream media to spread its propaganda, bribe ministers of other parties and break elected State Governments.
Several State Governments formed by other political parties through the power of people's elected mandate have broken up with BJP bribing ministers of other parties in power making them withdraw support and join BJP.BJP then obtains numbers to form Government there.
These sort of activities are known as horse trading. This is considered very undemocratic as Government elected by people is broken up by BJP by bribing ministers.
Karnataka MLAs resignation: Congress accuses BJP of horse trading
Give us full majority so that the BJP does not indulge in horse-trading: Rahul Gandhi
Goa power tussle: What is horse-trading? Why is Congress accusing BJP of it?
Existing measures that brought transperancy in political donations removed
Before electoral bonds were introduced, there was transperancy in political funding done by companies through banking channels although unaccounted-for money could be donated through cash secretly.
As explained in my earlier article, the Companies Act of 2013, allowed Companies to donate only 7.5% of the average profits earned from their last three fiscal years. So, only companies that engaged in legitimate businesses that made profits were allowed to donate to political parties within set limits.
Donations that companies gave to political parties were also to be mentioned in their balance sheet with details of the amount donated and the receipt political party for shareholders to be aware of these donation particulars.
The Companies Act was changed by BJP Government in 2017 to have companies donate unlimited sums of money which would be tax-free.
Plus, foreign companies were allowed to donate through their Indian subsidiary offices.
This setting was perfect for BJP's electoral bond scheme to function allowing loss-making companies to donate crores of funds, allowing Black money to fill their coffers.
Earlier Political parties were permitted to receive donations above Rs 20,000 only via regular bank cheque route and these details had to be disclosed in the annual reports that they file with the Election Commission.
Extra money power obtained by BJP has enabled it to become India's most dominant party weakening democracy
Electoral Bonds will be an interesting chapter in Indian history where the Government under Narendra Modi's BJP party legalised corruption with a scheme that permitted only them to receive secret funding. As explained, BJP has got the most amount of funding and has used electoral bonds to fund various elections, with one major central Government election on 2019, where BJP won.
This sort of opaque funding schemes have resulted in BJP getting extra power with excess money extracted from corrupt Corporate entities and rich business people which has resulted in opposition parties having no level playing field to function as they should in a democracy.
India's upcoming Central Government Elections hopefully takes place free and fairly!!
I wish Indian Citizens all the best for the upcoming elections and vote for the party that's best for our country and for India's democracy.
Please read my other stories highlighting why free and fair elections are doubtful to take place in India with EVM machines having issues as well and how main opposition party has now got its bank accounts frozen by the Income Tax authorities controlled by the BJP Government.