Parliament and Neta

FM on Reviving Electoral Bonds: A Memory From the Past or a Continuing Saga?

There have been ample and unambiguous signals that the electoral bonds story is far from over.

On 26 March 2024, former Finance and Economic Affairs Secretary of India Subhash Chandra Garg wrote a piece titled Electoral Bonds Are Now History. Did the Government Let the Donors Down? As the dust was still settling down on the matter, less than a month later on 20 April, Finance Minister (FM) Nirmala Sitharaman had been reported saying that the Bharatiya Janata Party (BJP) intends to bring back electoral bonds in some form after wide consultation will all stakeholders if elected back to power in the 2024 general elections.

It seems that the thinking in the Finance Ministry headed by Garg headed previously has undergone some change at least in the recent past.

But did the Electoral Bonds (EBs) actually become history with the Supreme Court’s (SC) judgment on 15 February, not to speak of the subsequent hearings on 11, 15 and 18 March when questionable affidavits filed by the State Bank of India (SBI) were discussed? And now with the FM’s statement, it seems history is still being written and the saga is continuing.

There are, however, several instances of the ‘history’ purportedly claimed by Garg and several other pronouncements he has made in public platforms though it must be said that he has also made some really valuable revelations.

What Does ‘Non-Existent’ Feature Really Mean?

It is claimed in Garg’s piece that “the data released by the State Bank of India (SBI) on 21 March has blown away the critical non-linking design feature of the bonds by disclosing the invisible and systemically non-existent alpha-numeric code embodied in the bonds for security purposes” (Emphases added in bold).

The phrase “systemically non-existent” seems especially intriguing. A plain reading implies something that does not exist ‘systemically’ or possibly ‘in the system’. However, the same ‘thing’ is referred to as a “design feature” and “invisible”, and more importantly, it is supposed to be “embodied in the bonds”.

The word ‘invisible’ is not really accurate. It is true that the so-called “non-existent” design feature which was “embodied in the bonds” was invisible to the naked eye but as Journalist Poonam Agrawal showed soon after the sale of EBs was started, it was clearly visible in ultraviolet light.

What defies imagination, however, is how can something which is “embodied in the bonds” be “non-existent”?

On a lighter note, it could be one of the finest examples of bureaucracy in the tradition of the dialogues of the British comedy series Yes, Minister and Yes, Prime Minister, delivered by characters Sir Humphrey and Bernard.

On a less light note, this reminds us of the words of the late Arun Jaitley, the Finance Minister in 2017-18, whom Garg refers to with approval in the first two paragraphs of his piece, who was reported to have described the EBs in a customary media interaction in the afternoon of 1 February 2017, the budget day in the Lok Sabha.

This is what he said – “These bonds will be bearer in character to keep the donor anonymous”. This is when the title of the section consisting of two paragraphs in the budget speech was “Transparency in Electoral Funding”.

The uncanny similarity between a “non-existent” feature being “embodied in the bonds”, and an anonymous but transparent bond is hard to miss!

How Was the EBs Scheme Conceived?
Another observation that needs clarification is the following:

“The sad state of affairs existed because the corporations and rich individuals were not interested in making it known which political parties they donated to for reasons that may or may not be justified. So, the government brought in three big changes in the architecture of political funding to meet this key reluctance and make electoral bonds a success.”

This paragraph clarifies arguably the primary reason for introducing the EBs Scheme. What is described here as a “key reluctance” is more precisely described in an interview by Garg when he says “The buyers demanded as a pre-condition for using this scheme for giving donations.”

Reading the above two paragraphs together helps speculate how the EB scheme came into existence. An essentially simplistic scenario is that the government (read the ‘political party’ in power) consulted the corporate world about what would encourage the corporate world to donate to political parties). The corporate world demanded anonymity and the government decided to make that possible even though it meant bringing together irreconcilables such as transparency and anonymity, and non-existent and existent.

This also provides a clue to what the Finance Minister might have meant when she mentioned “wide consultations with all stakeholders” in her 20 April remarks.

The above can be paraphrased to say that the EBs scheme was a result of an active collaboration between the government and the corporate world. If that sounds like a business-politics nexus, is that an accident? And who was laying down the conditions and who was trying to meet them shows who was driving the process.

Institutional Functioning: A Further Revelation
The 26 March piece holds the SBI guilty of two wrong actions:

The recording of the “non-existent” alphanumeric numbers, and the second is approaching the Supreme Court for an extension of time.

For this, the questions asked are: “Why did the government let the SBI do it? Did the SBI have the unspoken approval of someone in the government to do so?” (Italics added).

Then the observation is, “Instead, the SBI filed a petition in the Supreme Court two days before the deadline of 6 March seeking time until 30 June 2024. Why did the government allow the SBI to make this plea?”

The parts of the question marked in bold above provide a key revelation of the functioning of the SBI and the relationship between the SBI and the government.

From the mere fact that these questions have been raised, it is clear as daylight that the SBI was expected to function under the direct supervision and control of the government. This sets to rest the myth of independent institutions.

And the EB Saga Continues
There have been ample and unambiguous signals that the story is far from over.

The very first one was an attempted intervention on behalf of some business and industry associations during the SC hearings on 15 and 18 March. This was followed by several opinion pieces in the media criticising and opposing the judgment.

Recently, a review petition has also been reported to have been filed in the SC. Then came authoritative refutations. The Home Minister and the Prime Minister in different media events claiming that the fact that all the information about donations has been made available to the people at large is only because of the existence of the EBs scheme.

Had there been no electoral bonds scheme, all this information would never have become available to the public. This seems like selective amnesia. All the efforts made by the SBI to deny the disclosure of the information including filing affidavits of doubtful accuracy in the SC seem to have been miraculously erased from the memory.

Of course, an even clearer statement came from the FM on 20 April which confirms that the saga continues and we need to wait for the results of the Lok Sabha election to see how it evolves.

The article was originally published in The Quint.