Earlier today (30 October), in an affidavit submitted to the apex court, the Centre, through the Attorney General R Venkataramani, stated that citizens do not possess a general right to know the sources of electoral bonds.

Showcasing indisputable clarity on the subject, the Attorney General argued against the general right to know everything for undefined ends.

Electoral bonds, through which parties now accept contribution from individual donors (residents of India) or organisations (incorporated in India), were first issued in 2018.

The payment for purchase of these interest-free bonds are made only through bank accounts, upon the buyer adhering to the KYC norms. Further, the buyer is required to donate with the bonds within fifteen days, after which the party can encash it through the authorised bank.

Thus, the digital-cum-paper-trail, when it comes to purchase and transfer of bonds is in place. One cannot walk into a bank and make a cash payment for the purchase of bonds.

Yet, these electoral bonds have been termed as a threat to the democracy of India, rather naively. The critics have regularly demanded, through petitions before the apex court, and via media activism, that the names of the donors be made public.

Put simply, the critics argue that for more transparency in the electoral process, it is important to know which person gave how much money to whichever party.

This argument on fails on multiple levels.

For starters, it does not address the problem of transparency. The process for purchase and transfer of electoral bonds has been established to ensure illegitimate or black money is not deployed for the purchase of bonds. Every money passing through a bank is accounted for. Thus, the question of black money does not arise.

On the transparency front, one can admit the argument for parties to declare the value and volume of bonds, annually, or quarterly basis.

Two, it creates another problem; of vendetta politics. Even if we were to assume that making the names of political donors public would usher more transparency, how does it guarantee that these individuals or companies would not be persecuted by the government (the one by the party they did not donate to) in the future?

In a country where politics tends to be petty, infrastructure projects are stalled after a change in the state government, state police is often employed to arrest journalists or party spokespersons from other regions, making the donor names public is a recipe of inevitable disaster.

However, the vendetta is not only possible for individuals and companies on the opposite site of the political spectrum.

If the recent rhetoric of the Congress is any indicator, the same donors can be used to attack the government. These donors may work with all state governments, across party spectrums, and may be donating to all the parties, but there is no guarantee of them not being misused as tools for a political slugfest.

A case in point is the Adani Enterprises. Assuming they were one of the donors to the government in power, imagine how they would be crucified by the media in the west, running short-seller backed reports against them, or the parties in India.

Interestingly, what no one wants to remember is that under the Congress government, previously, between FY07 and FY12, the same Adani Enterprise registered a 74 per cent CAGR in credit growth — the highest among the top-ten corporate houses in terms of debt taken back then (the top ten had 40 per cent CAGR, while bank loans had a CAGR of 20 per cent).

Thus, transparency with respect to the donor is no guarantee of immunity against the slugfest that may follow.

This political slugfest will have two major consequences, as already evident by the Adani fiasco since February.

One, every project awarded by the government to any private entity, across sectors, will be subjected to needless scrutiny. Most projects would enter legal disputes at the stage of land allocation itself. Privatisation and monetisation of PSUs and other assets would suffer.

The resulting bureaucratic delays would impede private sector investment and would only usher negative sentiment against companies.

The other consequence will be the media trial. In February, many media groups, led by self-proclaimed ambassadors of truth had declared that Adani was single-handedly responsible for bringing the Life Insurance Corporation of India (LIC) close to insolvency, because of the fall in the stock price of the former.

While no one was willing to make the basic fact-check about LIC's quantum of holdings, and how it's Rs 35,000-odd crore holdings made up for less than one per cent of the assets under management, the media trial continued unabated.

Tomorrow, similar media trials can be launched against founders, startup CXOs, actors, influencers, or even communities, for their choice of a party while making the donations through electoral bonds.

The spillover effect will also be felt in policy formulation. Any policy that remotely relates to the private sector will be plagued by an endless debate on which company benefits or which one loses.

Reforms pertaining to labour, land, agriculture, education, and even manufacturing will never see the light of the day. Perhaps, these are the undefined ends the Attorney General referred to in the court.

The demand being advocated will only create a chain reaction of new problems, each bigger than the last.

Transparency, with respect to electoral bonds, must be defined clearly. It is not about who donated what, when, and to whom, but which party got how much, when, and in what volume.

To say that because one party receives four times the amount than another party, is not an accusation against the former.

To claim a nexus of parties and industrialists is also incorrect, for the latter, in most countries, work with all the parties.

Quite like the invisible hand of the free markets, electoral bonds are a strong indicator of the political sentiment in the markets and on the ground. If the communists or Congress are unable to attract the volumes and values, perhaps, the problems lies with them and not with the donors.

Transparency in electoral process

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