A public policy is an all-embracing mode of creating situations which ought to be befitting for the society. These rules are formulated and implemented to increase the overall welfare of the society. Ideally, this welfare should be increased in such a manner that at least one section of the society is made better off without making anyone else worse off. However, the policy makers are still struggling to find what can prove to be a utopian rubric to fulfil the clause of “no losers” while formulating a policy. The realm of policy making is not all plain sailing. As soon as it is introduced, without considering the factor of “time-lag,” critics tend to evaluate the plausible impacts of a policy. One such instance was the introduction of Electoral Bond Scheme (EBS) in the year 2017. After a year of backlash for being deemed as a tool of unlimited political funding for elections, EBS was passed in the parliament in the year 2018.
In 2017, the Ministry of Finance headed by Mr. Arun Jaitley, paved the way for political funding for elections with the introduction of the EBS. For the majority, this first-of-its-kind instrument was a cynical manipulation of policy formulation. This served as a mode of clearing the path of political funding with an added incentive of anonymity for the buyer. This scheme divided the world’s largest democracy in two sections. The first group was represented by a few who tried to defend this scheme while the second group, represented by most citizens, deemed it to be an archetypal case of malfeasance by the ruling party. By and large, this policy was unfair as it was a scheme by the people in power and in favour of the people in power.
Under this scheme, people could buy bonds ranging from a thousand rupees to one crore. This bond could be purchased only from State Bank of India (SBI) for a limited period of fifteen days. The only condition befitting the buyers despite parting with their money was the aspect of anonymity. The purchase of the bond had the stipulation wherein the identity of the buyer would never be revealed. The factor of anonymity relaxed the fetters of limited donations. This was even evident by the fact that in the elections of 2014, the total money raised by voluntary donations for parties was rupees 622 crores. In the year 2019, this figure crossed a sum of 2700 crores. This sum is enough to help the Bombay Municipal Corporation (BMC) to fix the potholes in Mumbai twice, raise 5200 children and fund their education till they reach the age of twenty-one, adopt 700 villages like Donja, fund ISRO’s Mars mission five times, and provide salaries to approximately 28 lakhs contractual teachers. Despite the unfeigned efforts of the opposition to stop the implementation of this scheme, the ruling party dominated both the houses of the parliament as this bill was passed with ease.
Electoral bonds were issued six times in a span of one and a half years. In 2018, these bonds were issued in the month of January, March, October and November. In the following year, these bonds were issued again for a window of fifteen to twenty days during the elections in the month of April and May. According to an RTI, out of the total sum collected, Rs. 1716
crores were solely in the year 2019. The rest Rs. 1056 crore was the cumulative sum of four different periods. Moreover, the donations were skewed as the ruling party gained around 73% of the donations whereas the runner-up could manage to collect a meagre 15% of the total donations. It was quite sceptical that why the issuance of these bonds had such a high frequency and why it was beneficial only for one party. Though the ruling party tried to justify the highly uneven distributions, stating it is the will of the people and they support them, this highlighted the advantage of one party over its counterparts and the head start that one had for the elections. To decode the catch in this setup, EBS was a perfect mechanism for influential individuals to part away with their unaccounted money, support a political party before the elections, and receive favours from them post-elections.
There are arguments in favour of this scheme which try to rationalise its stipulations. What if the absence of the anonymity clause jeopardised the buyers and the other parties could target them? Thus, the right to privacy was a must in such a scheme. There was even a rationale that unclean money plus no transparency can be an efficient way to utilise the unaccounted money. There was no possible way in which the unaccounted money could be brought back in the economy without getting squandered. For some people, this option was more feasible than to wait for the next tax amnesty program and be on the radar of the Income Tax Department incessantly. While the former argument has some rational explanation (considering the amoral practices prevalent prior to the elections), the latter claim can easily be countered. Why this innovative way of using the “unaccounted money” can be used only for election campaigns and not for eradicating other finance related issues in India? Moreover, what could possibly serve as an incentive for one to buy this bond? The buyer could be anyone, this scheme fascinated Special Interest Groups (SIGs) who could support a party during elections by buying and redeeming bond in their favour and seeking returns once that party is at the helm of financial decisions of the economy.
This move by the government was taking the shape of a financial turmoil which was an outcome of fulfilling political motives. The government was even challenged in the Supreme Court. Though there were numerous efforts to repudiate this scheme prior to the elections, there was little that even the judiciary could do. The Supreme Court asked the Election Commission to investigate this issue and accentuate any plausible impacts on the outcome of the election results. The paucity of time led the election commission to adopt nearly a no action policy as they demanded nothing but only the figures of donations made in favour of a party. The electoral bond scheme was unequitable on various grounds and quashed the essence of a policy. EBS in no sense meant to increase the welfare of the society as any amount spent by the parties for their election campaigns aided only the politicians in ensuring their seats and was certainly an addition to their welfare. In a nutshell, this scheme gave power to SIGs to lobby the government for policies beneficial to them and which might take a toll on the overall welfare of the society. The rationale that was put forth by the government to justify this scheme was equally flawed as this scheme was beneficial only for the privileged class which included the politicians and the SIGs and excluded the commoner.
Author: Priyam Verma
B.Sc. Economics (Hons.) Symbiosis School Of Economics