Saturday, February 17, 2024

Electoral Bonds

I am a little disappointed with the judgement of the Supreme Court on the Electoral Bonds.

One of the most important aspects of a democracy is Confidentiality. One should be able to support a political party without disclosing to which party one is supporting. It has two aspects. First one is voting inside a polling booth, and second one is supporting outside the polling booth. Voting inside a polling booth is confidential and others do not have any way of knowing. But, supporting a political party outside the polling booth confidentially has many roadblocks.

Except for the businesses of politicians, no business person would like to align with any political party publicly. They always wanted to be seen as neutral to everyone. They try to tell all the political parties that they are with them. They do not want to disclose any support that they do to any political party. If they are seen as aligned to one political party, they will face many problems when that party is not in power. 

If one does not appreciate the fact that there are few people/companies that want to support the political parties secretly, they need to learn many things in democracy and politics.

Before electoral bonds, if a company wanted to donate to a political party secretly, it was a lot of work for them. They cannot write a cheque in the name of the political party, as that would be reported in the company books, and it would be disclosed. What they used to do was, they manipulate the accounts and take some money out of the company (by not so legal way), and give that cash to the political party. 

Electoral bonds was trying to fix the issue of the anonymousness. A company can buy an electoral bond through the company's money from the bank by paying money either digitally or through a cheque. The electoral bond can be physically given to any political party that the company wishes, and the political party can redeem and get the money in its bank account. 

By this, the company does not need to manipulate the accounts. Manipulating the accounts comes with a cost, as the people who supported with fake bills/accounts/companies would need some percentage of commission for their work. Also, companies won't get any tax benefits from donations to the political parties when they donate that way. With Electoral Bonds, companies would not need to manipulate the accounts and would save money from there. Also, they would get tax exemptions when they donate through Electoral Bonds. 

Even for political parties, it is not so easy to manage a lot of cash. When there is a lot of cash, it is possible that the lower level leaders would siphon some money. It would be hard for the top leaders in the political party to manage huge cash. If the money is in the bank account, then the top leaders in the political parties have control on the money.

Arun Jaitley was a treasurer of BJP for a long time. He faced all the problems, and he wanted to make it simple for both the companies and the political parties, and brought Electoral Bonds. 

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