Election campaign funding in India could make a mud-wrestling pit look clean. This has oft been said. Numbers cited off the record for what it costs to contest a single Lok Sabha seat are in such a wide range that high multi-crore figures have lost their shock value. According to a study by the Centre for Media Studies, this year’s general elections would see as much as ₹50,000 crore being spent, up 40% over the 2014 polls. For decades, donations to parties and candidates had largely been in cash, often from shadowy sources, raising grave questions of political integrity. In 2017, however, the Bharatiya Janata Party-led government started a much-vaunted “clean up" exercise by changing the official rules on corporate donations and introducing electoral bonds. Both these measures are under fire now that the Election Commission has filed an affidavit at the Supreme Court against the shroud of opacity they have placed on the funding of political parties.
Before fiscal 2017-18, corporations could give parties no more than 7.5% of their average net profits over three years, and they had to declare which parties these were. The government dropped both this cap and the need to report beneficiaries. Also, foreign firms are barred from funding parties, but the definition of companies deemed “foreign" was tweaked to mean only those with majority overseas ownership. The biggest move was the launch of electoral bonds, which any individual or entity could buy from a designated bank and turn over to a party. These “bearer" bonds were designed to allow anonymous donations. At the time, finance minister Arun Jaitley had said these would help cleanse the system. As they could replace bagfuls of cash, this logic was widely accepted. Their plus point, he argued, was that while donors did not need to reveal their names, parties would have to disclose the sums received. From the data available so far, it seems they have not been as successful as expected. Also, despite the facelessness of donors, who may want to keep their choices secret, the proceeds are overwhelmingly in favour of the country’s ruling party. This may only be a reflection of corporate preferences—and businesses are the biggest users of these bonds—but has still aroused suspicion among opposition parties and their supporters that something is amiss.
That the revised donation regime lacks transparency is not in doubt. Whether it flouts constitutional provisions is for the judiciary to examine. However, it is also true that campaign finance has always existed in a dark zone, so the legitimacy given by electoral bonds to fund-raising from dubious sources—from abroad, for instance—can be viewed as a pragmatic shift that casts some light on at least one end of the funnel: party receipts. The fairness of an electoral system where one or two parties corner most of the legitimate funds on offer is another matter. Political parties that appeal to poorer voters, for example, are indeed at a severe disadvantage. A fairer system might require the state to pool all the resources mobilized and then split the money with all parties in the fray by an agreed-upon formula: by vote shares achieved in the previous elections, for instance.