The Secret Identity of Donors Through Electoral Bonds: Increasing Transparency or Covering Crony Capitalism?

Introduction

Why Does the Government of India Want to Keep the Identity of Donors Through Electoral Bonds Secret?

The concept of Electoral Bonds has been a topic of significant debate in the context of Indian politics and governance. This article delves into whether the government's intent behind the secrecy regarding donors is to legalize crony capitalism, as suggested by the former Chief Election Commissioner, SY Quraishi.

Understanding Electoral Bonds

To understand why Electoral Bonds were proposed, it is essential to have a basic understanding of what they are. Electoral Bonds are financial instruments issued by the Reserve Bank of India (RBI) that political parties can use to receive funding from verified sources. These bonds can be gifted to any political party by a person or entity. The key feature of Electoral Bonds is that the identity of the donor remains anonymous, while the receiving party’s name is recorded.

The Ultimate Purpose of Political Parties

Political parties primarily aim to win elections, gain and retain power, and implement their vision for the state or country. To achieve this, they need substantial financial resources to finance their campaigns and internal operations.

Why Do Political Parties Need Money?

Winning elections and running party organizations are extremely costly endeavors. Political parties incur expenses on advertising, logistics, infrastructure, and personnel. The primary sources of funding are membership fees and donations from individuals and corporations.

Why Do Corporations Donate to Political Parties?

Corporations donate to political parties because:

They believe in the political and economic stability that a functioning democracy provides. They align with the party's ideology or manifesto. They seek tangible benefits, such as contract awards or favorable policies, when the party is in power.

It is crucial to understand that most corporations do not have political or ideological interests; their primary motivation is self-interest.

The Consequences of Transparency

If the identities of donors were public, several negative implications could arise:

Donors risk public scrutiny, which could harm their businesses and brand reputation. Public knowledge of donations can lead to accusations of preferential treatment and conflicts of interest, questioning the integrity of the party and its decisions. Opaqueness helps both the donor and the receiving party avoid political and financial risks. The lack of transparency prevents rivals from using donations as a counter-strategy, reducing competition and overall expenditure. Poor individuals and groups, who often benefit from transparent and accountable governance, are the primary losers in this opaque system.

Win-Win Situation for Powerful Sides

Transparency about donor identities would benefit political parties that are already in power and corporations looking to secure favorable policies. Both sides share common self-interests, leading to a mutual advantage. However, the poor and marginalized, who often need transparent and accountable governance, lose out in this opaque system.

The Argument for Crony Capitalism

According to SY Quraishi, former Chief Election Commissioner, the secrecy surrounding donor identities may be enabling crony capitalism. Crony capitalism is a system where influential individuals or groups form close relationships with politicians or government officials to secure economic advantages.

Conclusion

The debate surrounding Electoral Bonds continues to be contentious. While transparency in political funding can enhance accountability and reduce corruption, the current system favors powerful entities at the expense of the general public. The government's decision to maintain donor opacity suggests a preference for maintaining the status quo, which benefits influential stakeholders.

It is essential for citizens and interested parties to stay informed and advocate for greater transparency and accountability in the electoral process to ensure that the governance system truly serves the public interest.